August President's Message

Aug 18, 2015

The Australian dairy industry has historically managed price volatility, global supply and demand issues and the fluctuations of the Australian dollar to good effect, maintaining international competitiveness, innovation and resilience to market volatility.

While we’re in volatile times, there is a lot more to be factored into the market in the next few months. Rather than panic, we need to ensure we are prepared for the short term difficulties facing us and remember that the long-term outlook for dairy is positive, despite current market volatility.

 

Industry needs to work to its strengths as a cost-efficient milk producer of quality dairy products in order to face the expected challenges. Within the industry there are considerable resources and work being applied to help dairy farmers confront the volatility challenge. Australian Dairy Farmers (ADF) is working in partnership across the industry and with government to undertake work and analysis to support Australian dairy farmers in their decision making.

It is reasonable to ask why up until now the Australian dairy industry has not been affected to the same degree as New Zealand. Unlike New Zealand Australia has more the 50 percent of its production consumed domestically. This provides a dampening effect on the downward trend of international markets on farm gate pricing. Our product mix has also allowed for the pricing trends to be less severe. However, there is no doubt that this international pricing impact is placing downward pressure on expected farm gate pricing that was not even seen two to three months ago.

Those farmers who supply processors that are uncontracted and exposed to world export pricing should treat the 2015/16 season with a significant amount of caution, understanding their underlying costs and being aware of input costs which will affect profitability.

Whether you’re a farmer, state organisation or peak body, we are all striving for the same outcome – a healthy and sustainable dairy industry. Industry projects such as the Sustainability Framework and the Australian Dairy Vision help provide a strategy for ADF’s efforts. On this note, it is with great pleasure that I welcome Benjamin Stapley as incoming Chief Executive Officer (CEO) of ADF. With a strong background in member advocacy, stakeholder engagement, policy development and media management, Mr Stapley comes into the role after two years as Director of Policy and Regulation at the Plastics and Chemicals Industries Association (PACIA).

I look forward to the fresh perspective and expertise that Ben brings to the role and along with my fellow Directors, National Council and staff look forward to working with him to continually improve the sustainability and profitability of farmers across all dairying regions. I hope you will all join me in welcoming Ben to our dynamic industry when he commences as CEO on 1 September 2015.  

Noel Campbell

ADF President

Bipartisan support for water buybacks cap essential

Aug 18, 2015

The Australian Dairy Industry Council (ADIC) has reiterated its long-standing support of the 1500 gigalitre (GL) cap on buybacks in the Murray Darling Basin Plan (MDBP) with its submission to the 2015 Water Amendment Bill last month. The Bill, which will legislate the 1500GL cap as part of the 2750GL target under the Basin Plan, requires bipartisan support to deliver dairy farmers with much-needed certainty about future water availability to sustain their business.

The 1500GL cap provides dairy farmers in the Murray-Darling Basin with much-needed certainty about future water availability to sustain their business. At the same time, environmental water can continue to be recovered through water-saving infrastructure projects, which will benefit the environment, farmers and local communities more effectively than buybacks.

However, there were aspects of the Bill that the dairy industry did not support, in particular the fact that the 1500GL buybacks cap applies only to water recovered towards meeting the 2750GL target. Additionally, the failure to address long-standing limitations in the Water Act 2007 and the Basin Plan in achieving the socio-economic neutrality and triple bottom line outcomes promoted so often by decision-makers is a missed opportunity.

The ADIC’s key recommendations in the submission to the Bill were to:

  • Ensure that the 1500GL cap on buybacks includes the 450GL in the Water for the Environment Special Account
  • Clarify that the entitlement transfer to the Commonwealth relating to infrastructure and reconfiguration for state programs are excluded in the 1500GL cap on buy backs.
  • The Basin Plan socio-economic neutrality test should include collective impacts on irrigation districts, community and water market.
  • Amend the Basin Plan to ensure that the 2750GL target is achieved first before any water recovery is counted towards the 3200GL target, and that any water recovered under the Special Account first covers any shortfall to the 2750GL target.
  • Clarify that the 450GL “up water” is an up-to amount, not a minimum.
  • Enable environmental water trading where the proceeds can be reinvested in works and activities for environmental outcomes, and to cover the Commonwealth Environmental Water Holder’s storage and other costs.

Bipartisan support for the legislative change remains a key priority for the ADIC, with representatives meeting with both sides of parliament to ensure the importance of passing the 2015 Water Amendment Bill is heard and acknowledged across the board.

To see the ADIC’s submission to the 2015 Water Amendment Bill click here

 

 

Westpac farm innovation challenge

Aug 10, 2015

Applications are open for the ‘Westpac Innovation Challenge’, an opportunity for start-ups and agribusiness entrepreneurs to develop new ideas to revolutionise Australia’s agricultural sector. A $40,000 prize will be awarded to the entrepreneur that creates the most useful and digital solution for Australian agricultural producers and agribusiness. For more info, or to apply, please see here.

 

ADIC reiterates need to implement China-Australia FTA in 2015

Jul 31, 2015

The Australian Dairy Industry Council (ADIC) has reiterated the importance of ratifying the China-Australia Free Trade Agreement (ChAFTA) within the 2015 calendar year, to ensure the benefits can reach Australian producers as quickly as possible.

Any delay in implementation of the deal beyond 31 December 2015 will cost Australian dairy between $20 million and $60 million in tariffs. This will make it more difficult for the Australian industry to compete and gain further market share.

ADIC Chair, Noel Campbell said while the council recognised that debate about the ChAFTA is part and parcel of a vibrant democracy, the Parliament needed to keep in mind the opportunities at stake for agriculture and food production.

“For Australian dairy to grow and invest in our future profitability, we will require markets that offer a way forward and match our progress,” Mr Campbell said.

“China’s population is set to reach 1.6 billion by 2050 offering enormous opportunity to sustainably grow beyond domestic markets. Our opportunity in China is underpinned by their demand for high quality, safe, value-added products such as infant formula.

Mr Campbell reiterated that parliamentary support for the agreement, that sees the removal of all tariffs on dairy imports over a decade, remains essential.

“With a long record of innovation and adaptation to changing conditions and markets, Australia’s dairy producers are in a strong position to meet the particular demands of boosting exports to China and growing our market share,” Mr Campbell explained.

The Australian dairy industry has had a long and close relationship with China and ChAFTA will allow our industries to further develop this long-term relationship to the mutual benefit of both countries.

Timing is of the essence. If farmers are to maximise benefits from the removal of tariffs then the deal must be implemented in this calendar year.”

The ADIC looks forward to working with both sides of Government to ensure the implementation of the ChAFTA by 31 December 2015. 

 


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