What a gas

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.

John McQueen

Interim ADF Chief Executive Officer

 

Early pricing signals essential

Jun 10, 2016


Many in the dairy industry feel under enormous pressure at the moment. Farmers not only have the challenge of adapting their business plans to recent price shocks – we also pick up the paper to read about it every day. With more processors' opening milk prices due in coming weeks, following Warrnambool Cheese and Butter’s (WCB) announcement today, no doubt some will feel the pressure begin to mount once more.

We recognise that the announcement from WCB will come as a shock to many, given it is well below the cost of production. Despite the disappointing low price, we must recognise that they have heeded calls for early price signals and provided much needed certainty to their suppliers.

While we are an industry under pressure, we are also an industry that has the know-how and motivation to overcome these adversities and thrive in the long term. No one is alone in this scenario and we need to ensure that all farmers feel supported during tough times.

ADF, together with our state members and Dairy Australia is fighting for our farmers. We can’t solve all of the issues farmers are currently facing, but we can work to relieve some of the immediate pressures and accelerate change to ensure this doesn’t happen again.

We have welcomed the promises made by State and Federal Government, now they must stop playing politics and deliver. Farmers need certainty as to their options right now.

While we await Government decisions, there are industry resources available to help farmers manage the impact of recent events. It’s important to make the time to take up these opportunities. Dairy Australia’s Taking Stock provides free one-to-one business analysis that can help you prepare for the season ahead.

The Dairy Farmer Central website launched this week by the Victorian dairy industry, lists all of these tools and more. It also signposts events - some of these events will inform and help you plan for the season ahead, others provide an opportunity to take time out from the farm and get some perspective. We are working to make this website applicable Australia-wide.

These tools are not a silver bullet to restore our businesses but they will help navigate the challenges, so we can move toward a stronger, fairer and more sustainable future.

David Basham

ADF Acting President

South Coast Flood Recovery Assistance

Jun 07, 2016

Since heavy rains and wild winds hit the south east cost on 5 June, flooding has significantly affected dairying regions in Queensland, New South Wales and Tasmania. These floods have added further issues to the industry which is already dealing with significant strain and instability.

The Australian dairy industry has mobilised quickly to provide farmers with support. 48 hours on from the damaging events, recovery assistance is the primary focus. We are working to understand the full impact of the floods to ensure targeted assistance for farmers. 

We are working to ensure farmers have adequate access to clean water and power to enable them to keep milking. Farmers are working to protect and care for their animals during these extreme events. Unfortunately, there have been reports of cows being lost to the floods and we empathise with farmers having to face this difficult situation.

Fencing is also an immediate concern, with the high water speed having destroyed many farm fences, as well as loss of pasture and newly sown crops. 

Please see below for information on seeking flood recovery assistance, further updates will be made as the information is made available: 

If my property has been affected, what should I be doing?

  • Try to focus on your priorities by writing a quick checklist of all the jobs that come to mind – classifying them by what needs to be done today, this week and later in the month. Download your Dairy Australia ‘recovery priority list’ here.
  • Take photos of the damage on your property to build up an inventory of losses (i.e. pumps, fencing, feed, etc).
  • Keep records of damage on your property until Helplines become available. Accurate and timely information will help the relevant departments secure the best possible level of disaster assistance.
  • Keep all your receipts associated with recovery efforts.
  • Remember to ask for help. 

What other support is there to assist me?

  • Find out about the options for milking without electricity supply here
  • Find out how to manage the health and welfare of cows during floods here.

 


Progress and challenges revealed by dairy’s 2015 Sustainability Report

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...

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