June President's Message

Jun 30, 2016

Opening milk price announcements made this week by Murray Goulburn and Fonterra have once again, reinforced the need for improved transparency in the way milk pricing is structured and communicated in Australia.

Not only are the announcements much too late for farmers to properly budget and plan around, but many questions have to be asked to understand them. Add to the already complex system a loan repayment and the forecast opening price is far from what it first appears.

Both Murray Goulburn and Fonterra’s recent announcements are confusing and difficult to understand – they lack clarity and transparency.

Murray Goulburn’s repayment system is complex at best. Further, the exact amount that farmers will repay by the end of the financial year 2016-17 is not articulated in the announcement – nor is it clear that farmers will actually pay an initial repayment of 14 cents per kg/ms plus any further repayments Murray Goulburn decide to deduct.
 
Fonterra’s announced opening price of $4.75kg/ms was better than expected, however the detail around who received what is not clear. Existing Fonterra suppliers will receive around $4.75 ($4.73 due to interest on the loans). Any supplier who did not supply Fonterra milk in May-June (including farmers that had dried off) are not eligible for the Autumn offset and therefore receive around $4.54.  
 
We shouldn’t have to ask to get this information – it should be clear as day. After all farmers are providing the very lifeblood of these organisations, it’s in everyone’s best interests that we get this information up front and can work within these means. 

Improving the transparency of the milk pricing system is important, and Australian Dairy Farmers (ADF) continues to work with our state members to this end. It is essential that processors come to the table and discuss this as a collective, to help protect the future of our sector.

No one can dispute that the current market situation for dairy farmers, whether you are a supplier to the export or domestic market, is rough. Even the best placed businesses will be making difficult decisions.

While we cannot change the milk price, ADF is working hard with our state members to improve the transparency in the milk pricing system and simplify milk contracts. We are also fighting for farmers to better manage the risk throughout the supply chain so that they do not always bear the financial risk.

This weekend Australia takes to the polls and by next week the successful party will be moving into Parliament. ADF and our state members will be back in Canberra as soon as the elected party is announced to keep the pressure on.

As an industry dairy has supported its own and will continue to do so. We’ve never asked for a bail out but rather for targeted assistance that will help get our industry over the current hurdle and better balance risk throughout the supply chain going forward. We need structural change that improves fairness and brings more balance into the market – competition law can be improved more.

ADF acknowledges the Dairy Recovery Concessional Loans are now available in SA, TAS and Victoria. We welcome this support, and will continue to advocate that all affected dairy workers are eligible for this assistance. 

I encourage all farmers to keep talking to ADF, your state representatives and RDPs. It’s tough for everyone out there right now, and the season ahead will be challenging. This will go beyond the farm gate, with our service providers and communities likely to feel the pinch too – keep this in mind and let’s all look out for one another.

David Basham 

Acting ADF President

United we are always stronger

Jun 24, 2016

Australian Dairy Farmers’ (ADF) first priority in recent months has been to secure support for our industry led initiatives, and targeted assistance from Federal and State Government to help see farmers through the short term cash flow crisis. It is frustrating that this has created the expectation of immediate relief yet some farmers are not eligible. We continue to lobby strong on farmers’ behalf to secure access for all affected farmers to Dairy Recovery Loans, now available in Victoria and Tasmania. We expect criteria to be released imminently in South Australia and New South Wales.

Many farmers have been calling the ADF and state dairy farming offices to discuss these assistance mechanisms, and highlight accessibility issues. We encourage all concerned farmers to keep these communication channels flowing as it is vital for ADF to know which issues to target.

As an industry, we are going beyond these short term measures to create stability for our industry’s long term future. Central to this is finding new ways to manage price volatility for farmers.

ADF in collaboration with our state members has long advocated the need for competition policy reform that addresses the unequal balance of market power in the supply chain with not only a Mandatory Code of Conduct to control said power, but also a Supermarket Ombudsman to effectively regulate the code. We have made important in roads in the last two years, but there is still work to be done.

Ideas developed through the Markets, Trade and Value Chain meeting last week are being progressed and work with the Australian Competition and Consumer Commission is gaining traction.

All three major political parties have come to the table to discuss potential solutions over recent weeks, and this is to be commended. It is essential that this movement does not stop at political rhetoric, but rather translate to real and tangible changes for our industry.

Ensuring issues that affect our entire sector’s ongoing productivity and competitiveness are on the Federal political agenda remains equally important during these tough times.

In particular, ADF continues to seek commitments from all political parties to support dairy’s access to secure, affordable water resources. While recent rainfall has been a welcome reprieve for many regions the long term outlook for water allocations remains bleak. ADF continues to push for vital changes to the Murray Darling Basin Plan and environmental water trading to make certain enough water is available when farmers need it and at an affordable price.

Funding for dedicated agricultural health services and resources is urgently required to safeguard the wellbeing of our workforce. Federal Government should make ongoing commitments to vital resources including the National Centre for Farmer Health to match that of State Government.

We continue to work closely with the National Farmers Federation to accelerate agriculture by addressing key workforce issues including the scrapping of the backpacker tax, as well as supporting industry’s efforts to reduce carbon emissions intensity.

Ensuring these priority areas are addressed in the upcoming election will enable our industry to take control of its own destiny, and develop a stronger, more prosperous and sustainable future.

Australian dairy farmers know we’re not immune to significant market forces such as the slowdown in the Chinese economy, or the Russian ban on importing product. But the low prices announced recently will be below the cost of production for many farmers. While some have faced such volatility before their current situation is no doubt compounded by the unprecedented challenges driven by processor decisions in the 2015-16 financial year.

ADF continues to work with all our state members - QDO, NSWFarmers, SADA, TFGA, UDV and WAFarmers as well as industry partners to hold State and Federal Government to their promises of support, and to drive real, meaningful change throughout the supply chain for the betterment of our industry. Together we are stronger than we will ever be divided – and united we will support farmers through the challenges they currently face.

David Basham

Acting ADF President

Keeping an eye on the big picture

Jun 23, 2016

The first priority over the last few weeks has been to secure targeted assistance and roll out support to help farmers with their most pressing needs.

At the same time, we remain focused on the big picture – especially when it comes to water. It won’t be enough to help farmers get over this hurdle if their businesses later fall over because water is too scarce and expensive to stay milking in seasons to come.

We can’t control the weather. The recent rains are a welcome reprieve, but to make a substantial difference to the bleak outlook on water allocations for next season it will need to keep raining heavily in the catchments over the next few months..

So while we watch the skies, our priority remains achieving long-term objectives on what can be controlled. Environmental water trading, the Murray Darling Basin Plan and the Connections reset all have an important bearing on whether enough water will be available when farmers need it and at a price they can afford in 2016/17 and beyond.

We are advocating for State and Federal Government commitments to assist our industry by making more water available next season. Potential untapped sources include trade in northern Victorian allocations to urban centres such as Melbourne, as well as a share of the environmental water held in Victorian and Commonwealth accounts.

The amendments to the Federal Water Act last month mean that the Commonwealth Environmental Water Holder (CEWH) now has more flexibility to trade water it may not need. As of 31 March, the CEWH still had just over 300 GL in storage; while it has no plans to trade in 2016-17 at this stage, this may change as part of environmental planning now underway.

We also remain focused on the Connections reset. The announcement that only $388 million is left to deliver more than 100 GL savings was unwelcome news at a time when farmers already have so much on their plates. Now more than ever, we must get this reset right to provide sustainable infrastructure for a resilient dairy industry.

Once the election is over, we will be back in Canberra to keep the pressure on the elected party to achieve the Murray Darling Basin Plan’s environmental outcomes without removing any more water from irrigated agriculture.

State and Commonwealth Governments have an in-principle agreement to deliver the full 650GL in environmental offsets, and undertake more robust socio-economic assessment before any attempt to achieve more than the 2750 GL target. We are holding them to all of these commitments.

Nation-wide roadshow kicks off in Tasmania

Jun 17, 2016

Representatives from Australian Dairy Farmers (ADF) embarked on a series of national roadshows beginning in Tasmania on 4 May, in partnership with state dairy farming members.

Comprised of a series of farmer focused forums across the course of 2016, the roadshow offers farmers the opportunity to engage with national and state dairy member representatives on the issues most important to them and their region.

The roadshow is also an opportunity to get up to speed on progress and developments which have occurred over the past year, as well as talking through the industry’s election priorities for 2016.

ADF Senior Policy Manager, David Losberg said the regional forums would provide farmers with the opportunity to discuss the issues of critical importance to their region.

“Our industry is experiencing unprecedented challenges at present and we want our members and the public to engage with us, and ensure their interests are effectively represented. Our aim for these forums is to help provide clarity on the policy support mechanisms secured on farmers’ behalf and facilitate opportunities to make recommendations for future improvements.”

“Now more than ever it’s important that our farmers know who is representing their interests, and that we are tirelessly working on your behalf with minimal resources to gain the results farmers need to be successful in businesses and provide succession opportunities.”

Since May, ADF has visited dairy regions in Tasmania, New South Wales and Queensland. Queensland Dairyfarmers Organisation President, Brian Tessmann said the forums were a valuable opportunity for members to air their thoughts and express their needs to the people who represent them.

“The ADF Roadshows are always useful and insightful for our Queensland farmer members. The most recent events in Warwick and Maleny were extremely timely and helpful for our members who had a number of national industry questions given the situation down south.”

“It is important that we continue to work closely with ADF to continue getting results for our members at a national level and events such as these ensure that ADF have the opportunity to hear directly from Queensland farmers.”

The next roadshow forum takes place in Western Australia on 26 July. For more information on the roadshow schedule or any other details please contact Shona McPherson, ADF Media Officer via media@australiandairyfarmers.com.au or mobile 0447 293 844.

 

Representatives from ADF and QDO speak with farmers at the Maleny Dairy event in June. 

 

 

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