Not All Bad News

Nov 11, 2016

The American people have spoken and made their choice. It is amazing how things can change overnight. President Elect Trump’s victory in the United States presidential election has created a little bit of a stir in Australia and around the world.

Australia has an open economy and we are heavily reliant on exports. We depend on international stability and open borders to drive our economic growth. If Mr Trump’s views, which were expressed during the election campaign are realised, then the world trade environment is in for a very bumpy ride.

The Turnbull government promised that the ratification of the Trans Pacific Partnership (TPP) would deliver valuable new markets for Australian dairy. It was an ambitious pact that would have covered nearly 40 per cent of the global economy and solidified US leadership in the Asia-Pacific.

While Mr Trump’s election win has made the ratification of the TPP less likely, it is not all bad news for Australian dairy.

In fact, this election could open Australia to new opportunities and strengthen economic ties with countries in ways we never thought possible.

The China-Australia Free Trade Agreement (ChAFTA), ratified almost a year ago is a partnership that has the potential of becoming even stronger.

Australian Dairy Farmers (ADF) lobbied hard and strong for this once-in-a-lifetime deal and was closely involved in the negotiations.

Our dairy exports to Greater China have increased 46 per cent over five years, making it our largest dairy market export by volume and value. Import values have increased by almost 65 per cent year-on-year from approximately $456 million in 2014/15 to over $750 million in 2015/16.

The first half of 2016 saw the value of Australian dairy exports double. China’s market for Australian consumer goods has become much more sophisticated, with strong sales growth from supermarket chains and convenience stores. A growing middle class of roughly 300 million people want what Australia offers. Our industry’s ability to benefit China with safe, healthy, reliable sources of quality dairy products is essential for us in the long term.

China remains the largest importer of dairy products and it is still growing. About 16 million babies are born each year in China, and with the relaxation of the one child policy, that number is projected to beyond 20 million annually in coming years.

Over the long term, ChAFTA means more jobs across the Australian dairy industry both on farm and in processing plants. It will provide our industry with the confidence it needs to invest for a strong future.

Whatever transpires from the policy direction of a new US President and administration, the Australian dairy industry and Australian Government will do everything possible to ensure any changes in direction on US trade policy does not adversely impact the gains we have won for our dairy products access to markets.

The dairy industry’s long term growth will come from our ability to bounce back and make the most of the all the opportunities that are presented.

David Basham

Acting ADF President


 

 

Collaboration key to dairy success

Jul 09, 2016

With the official announcement of last weekend’s election yet to be made, the dairy sector (like the rest of the nation) is watching very closely and working to ensure that all political parties understand our priorities. Whatever the outcome, it is essential that stability reigns – effective policy formation and clear action to overcome challenges will be otherwise impossible.

Australian Dairy Farmers (ADF) has made clear its priorities for the next government – extend and streamline access to the concessional loans and Farm Household Assistance for all affected farmers, create a safer, more resilient workforce, ensure secure sustainable access to water resources and above all, address the imbalance of market power within the dairy supply chain.

It’s good to see that all parties have recognised the importance of supporting our farmers through the current challenge, as well as committing to developing innovative solutions to building long term sustainability of our industry.

However, it is concerning to see some are still calling for a fresh milk levy – an unworkable solution. If a fresh milk levy was imposed, it would potentially result in farmers who supply domestic markets subsidising their export market oriented counterparts. This is not a workable solution.

There are also potential difficulties associated with such a levy breaching Australian Competition and Consumer Commission regulations as well as potential issues with the World Trade Organisation.

The fundamental issue our farmers continue to face is that they wear the bulk of financial risk in the dairy supply chain. We need a practical and viable solution to increase transparency in the way the milk pricing system works and to simplify milk contracts to ensure the volatility of the market is better balanced along the supply chain.

This week UDV and ADF met with farmers in South West Victoria – to hear concerns, answer questions and build feedback about the current supply chain into our policy work. This is one of many meetings ADF will continue to participate in throughout the year, to ensure we are effectively representing farmers’ interests.

The discussion was robust. Overall, the consensus in the room was that trust has been broken and we need to find a way forward.

The challenges faced by farmers in Western Australia due to processor decisions reinforce the sector as a whole is enduring tough times – no state is immune.

Collaboration is what will get us to where we need to be. Our industry relies on all the elements to operate effectively. Farmers need processors and vice versa – so the solutions will require input from all parties.

Beyond this the public and the government ignore us if we do not operate as one. If we have a hung parliament, dairy will need parliamentary champions to advocate our policy priorities and the industry must work together to feed them that case.

David Basham

Acting ADF President

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...

Trans-Pacific Partnership signed

Feb 04, 2016

The official signing of the Trans Pacific Partnership (TPP) in Auckland, on 4 February has been welcomed by the Australian Dairy Industry Council (ADIC). The signing follows an agreement reached between the twelve negotiating countries on 6 October 2015.

The TPP made some gains made for the Australian dairy industry in improving opportunities in key export markets such as Japan.

The conclusion of the TPP continues a historic period of increased trade liberalisation over the past few years.

Following the signing ceremony, Australia must now go through a domestic ratification process. This means that before any binding treaty action is taken, the TPP text and a National Interest Analysis will be tabled in Parliament for 20 joint sitting days.

The Joint Standing Committee on Treaties (JSCOT) will conduct an inquiry into the TPP and report back to Parliament on 'matters arising from the TPP treaty and related National Interest Analysis and proposed treaty actions presented or deemed to be presented to the Parliament.'

The ADIC will provide a submission to the inquiry.


 

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