Mar 03, 2017
It is no secret that gas prices are on the rise.
An essential resource, gas is used to pasteurise milk and produce the heat needed for our driers to create milk powder.
Gas is already a significant input cost for dairy processors in Australia. Based on reports, gas prices are forecast to rise between 50-100 per cent by 2019. This will impact the processing of dairy and increase the manufacturing costs of milk products. The impact of any gas price rises can and will be felt by dairy farmers through their processors.
The rise in gas prices are due to supplies being diverted to meet international liquefied natural gas supply contracts, low levels of exploration and forecast production, restrictions on onshore exploration and development in some states and territories, and infrastructure constraints. Tighter gas supply translates to higher gas prices.
As the laws of supply and demand would suggest, Australians, sitting on bountiful gas reserves, should be enjoying cheap gas prices. But that’s not the case as a high percentage of our gas is being exported overseas.
Further to this, last year, the Victorian Government with bipartisan support banned unconventional gas exploration, including the controversial process of hydraulic fracturing (fracking), and extended a moratorium on onshore conventional gas exploration until the end of the decade.
New South Wales and Tasmania also have various bans on onshore gas exploration and development in place. This means that the competition by domestic and international consumers for gas from existing fields will intensify, which will drive up prices further.
There are surely many policy levers that can be considered in this environment. One such lever was implemented more than 30 years ago, and formalised in 2006, as the North West Shelf offshore gas production was being developed. The WA Government implemented a policy of domestic reserve of 15 per cent to ensure their domestic market was not adversely impacted from the development of export markets.
It is understandable why many communities and farmers are concerned with hydraulic fracturing (fracking), and why there was bipartisan support to ban this type of unconventional gas exploration. However, we support onshore conventional gas mining which currently has a moratorium and, according to the Australian Competition & Consumer Commission, is needed as insufficient reserves exist for domestic and international demand.
In response, the COAG Energy Council will be implementing a package of reforms. Even so, there is still uncertainty whether sufficient gas will be available to meet future domestic demand.
The dairy industry along with other manufacturers are concerned about the policy failures in Australia when it comes to gas availability and prices. We need to add our voice to the growing list of industry groups who are calling for urgent action to address the shortage of gas on the domestic market.
Interim ADF Chief Executive Officer
Mar 11, 2016
There is a rising demand worldwide for companies and industries to meet the needs of people today without compromising the ability of future generations to meet their needs.
Australia’s dairy farmers and manufacturers are proud to be part of a global movement which aspires to meet this demand, whatever understanding people
have of sustainability.
One of the ways we demonstrate our whole-of-industry commitment to increasing prosperity for industry and communities, our care for people and animals,
and minimising our environmental footprint is through the Australian Dairy Industry Sustainability Framework.
Established in 2012 to help guide Australian improvement against 11 targets and 41 performance measures the Framework is lead by the Australian Dairy Industry
Council, managed by an industry Steering Committee, and supported by Dairy Australia.
Our 2015 Progress Report shows our improvement, but also our challenges. During 2015 there were several areas of improvement including:
- The industry’s efforts in helping the Government to secure Free Trade Agreements with China, Japan and Korea, will help increase our competitiveness and profitability;
- The intensity of waste sent to landfill by manufacturers, which has dropped 46% since 2011, exceeding the target for 2020 several years ahead of schedule;
- The proportion of farmers with nutrient management plans, which at 58% is on-track to achieve the 2020 target of 80%, having almost doubled since 2013; and
- The reduction in the use of routine calving induction - 88% of farmers do not use it compared to 80% in 2014.
Although we made good progress against some targets, there are others where more progress is needed, such as increasing the proportion of dairy farmers who are aware of, and implement, the recently agreed (January 2016) standards and guidelines for animal welfare. Currently, awareness stands at 56% and our target for 2020 is 100%.
There are other areas where the industry’s performance has declined, such as the proportion of people who recognise dairy as a quality product, which slipped to 69% from a baseline of 72% (the 2020 target is 80%).
To ensure our industry remains current, relevant and accountable in the context of changing global and domestic conditions and expectations, a review of all the targets, indicators and performance measures in the Framework will be undertaken during 2016.
The review will take into consideration a broad range of emerging issues, stakeholder views, industry priorities, political agendas and global trends.
The ADIC is excited to share our progress thus far – it demonstrates just how powerful dairy can be when the whole supply chain works together toward its common goals.
We encourage you to take the time to have a look at the key areas that interest you in the online report and look forward to hearing your thoughts.
A snapshot of the Australia dairy industry and our sustainability progress...
Nov 23, 2015
A concerted effort to reduce power costs and dairy’s environmental footprint is seeing increasing numbers of Australian producers implement more efficient, ‘green’ on farm practices.
In Athlone, Gippsland former mechanical engineer and seventh generation dairy farmer, Lindsay Anderson is harnessing solar energy to the benefit of reduced on-farm costs. Converting all his large single-phase motors to three-phase motors using variable speed drives as phase converters, Mr Anderson has implemented renewable technology throughout his business. He devised a 5 kilo-watt grid-connected solar system which supplies power to his automatic milking system, his workshop and farm house.
This system provides enough power to feedback through the grid for a payment each quarter – providing some additional income for Mr Anderson.
“This system can save me between 15 to 33% of electricity consumption,” Mr Anderson said.
It also means there is even less diesel used on the property so the environment will also be better off.
According to dairy’s 2014 Sustainability Framework Progress Report, Mr Anderson is one of many dairy farmers adopting energy efficient procedures on farm. Since 2012 40% of farms have installed some form of renewable energy installation.
Chair of the Sustainability Framework Steering Committee, Chris Griffin said that dairy producers have always been stewards of the land, and are constantly getting smarter about energy efficiency on farm.
“Dairy farmers have a real commitment to managing land and water responsibly, reducing greenhouse gas emissions and protecting natural resources for future generations. They are constantly reviewing their practices in response to seasonal conditions and a changing climate,” said Mr Griffin.
“As a bonus, many farmers are finding that these measures are cost effective.”
Working with Australian Dairy Farmers (ADF) and Dairy Australia, the ADIC has lobbied hard to secure Government funding to support uptake of energy efficient technology on farm. Combined with industry investment, Federal and state programs have assisted farmers and manufacturers with the upfront capital costs in energy efficient or renewable energy technology, and therefore increased uptake.
The dairy industry has seen the benefit of such co-funded initiatives through Dairy Australia and the Federal Government’s Energy Efficiency Information Program. These nationwide assessments have already helped 1,400 farms. Guidelines have also been developed to complement these assessments and provide information about where energy is used in dairies, as well as identify where greater efficiency can be found.
In two years since the Sustainability Framework was implemented, manufacturers’ use of fuel and electricity has reduced by 14.5%. Together, the whole value chain is vigorously pursuing its target of reducing the intensity of greenhouse gas emissions by 30% by 2020.
“We will continue with programs and projects that are guiding the industry toward improved returns, while minimising our environmental footprint and improving the wellbeing of our people and animals,” Mr Griffin explained.
“There is still work to be done, but we are most definitely headed in the right direction.”
Earlier this year, ADF shifted its climate change policy, calling for joint industry and government investment in adopting energy efficient technologies on farm. Chair of the ADF Natural Resources Policy Advisory Group, Daryl Hoey said the revised policy highlights to Parliament, consumers and the broader community that the industry remains actively engaged in reducing its environmental impact.
“The scientific evidence, international policy, and public interest in increased climate variability justify industry action. Our whole value chain strives to continually reduce its environmental footprint, through uptake of new technologies, improved management and adoption of farming systems to suit climate variability,”
“The Australian Government can promote the industry’s effective response to climate variability through sustained investment in agriculture R, D&E and the uptake of energy efficient technologies on farm.”
This includes new solutions that both reduce emissions and improve profitability, international research collaboration, and methodologies that support a whole-farm-systems approach in reducing emissions.
“The Australian dairy industry is keenly observing the Government’s response to the United Nation’s Climate Change Conference taking place in Paris this December,” Mr Hoey said.
“We are aware the outcomes of this event may impact the Australian Government’s approach to emissions reduction policy. We want to ensure any policy initiatives do not undermine our trade exposed industry, but instead support dairy farmers’ ability to manage risk, innovate and adapt to climate variability.”
For more information on ADF's policy on carbon emissions and climate change click here.
Jul 18, 2015
The much-anticipated Agricultural Competitiveness White Paper released on Saturday 4 July on Australian Dairy Farmers (ADF) National Councillor, Roma Britnell’s dairy farm in Victoria has delivered key initiatives which mark a positive step toward delivering higher productivity and profitability for Australian dairy.
Key benefits for dairy farmers which have been championed by ADF as part of the Australian Dairy Industry Council (ADIC) include increased funding for Agricultural Counsellors abroad to address technical barriers to trade in overseas markets; improved flexibility of Farm Management Deposits and investment in establishing agricultural expertise in the provision of an Agricultural Commissioner for the Australian Competition and Consumer Commission (ACCC).
“We are pleased to see that key points of the ADIC’s recommendations to the Green Paper have been taken on board,” ADIC Chair, Noel Campbell said.
“In particular, the provision of $11.4 million over four years toward boosting ACCC engagement with agriculture, including an ACCC Agriculture Commissioner, will aid in fostering a stronger business environment throughout the supply chain.”
The ADIC submissions to the issues and green papers covered all aspects of agricultural policy with a particular focus on the following key areas:
- Continued support for research, development and extension projects;
- Overseas trade market access;
- Strengthening competition laws;
- Improving skilled labour availability.
The Government’s enhanced commitment to research, development and extension projects with a focus on innovation and risk management was also welcomed by the ADIC. The commitment of $200 million to improve biosecurity surveillance and analysis nationally will also play an essential role in creating a more durable, profitable and competitive dairy industry.
Additionally, the Government’s confirmation for water efficiency projects combined with improving existing water infrastructure and developing new infrastructure is positive. Increased support for these initiatives was a key recommendation in the ADIC’s submission to the Green Paper.
Mr Campbell said that the ADIC is committed to working with Government to see swift implementation of the initiatives delivered in the White Paper.
“The White Paper points us in the right direction in terms of where we want to go and as an industry we now look forward to working with Government to ensure that these initiatives translate into real outcomes for dairy.”
Click here to view the ADIC’s submission to the Agricultural Competitiveness Green Paper.