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
Jan 25, 2016
Welcome to the New Year. I hope you have all had the chance for a short break at least, and are ready to work together to tackle the challenges and opportunities that 2016 brings.
In recent years, Australian Dairy Farmers (ADF) has strengthened dairy’s ties with Canberra to raise the profile of the issues that matter most to our farmers. ADF has maintained our reputation of acting apolitically, being accessible to all politicians, and being willing to listen.
This year we will continue to build this profile, while simultaneously building on our capacity to deliver value to members.
So far in 2016, key members of the ADF team have visited members in central New South Wales. In February our CEO will visit Western Australia – to talk and listen about priorities for the year ahead. These are the first of many 2016 interstate meetings to follow.
I encourage you to take the opportunity and introduce yourself to our team. The passion and commitment that the ADF staff has to help achieve a stronger future for our industry is evident, and we are all prepared to listen to your thoughts, ideas and constructive feedback.
The beginning of the year has been challenging for farmers. Extreme weather conditions brought drought or very dry conditions in Tasmania, West Victoria, South Australia as well as savage bushfires in Western Australia. ADF is seeking to assist its state members with recovery efforts. I commend the efforts of WA Farmers, Western Dairy and Dairy Australia, in providing practical support and counsel to the affected farmers in WA.
Events like these are a timely reminder that so many aspects of our business are affected by elements beyond our control. ADF is committed to ensure that farmers have the information and resources they need to take control of what they can. Dairy Australia also has a great resource of tools and information to assist in preparation and recovery.
In February, ADF will host an environmental scanning and industry planning workshop with key stakeholders such as our state members and Dairy Australia. These sessions will aid in setting our advocacy priorities for 2016, to establish a sound policy platform which ensures we can capitalise upon growth opportunities delivered by 2015’s advocacy.
I look forward to getting out and about in order to meet with as many members and non-members as possible over the course of 2016 to ensure ADF can continue to deliver value for the industry.
Dec 21, 2015
The Coalition’s response to the independent review of the Water Act 2007 was released in December 2015. The Government’s decision to adopt all of the recommendations, some wholly and others partially, including to provide greater trading flexibility for the Commonwealth Environmental Water Holder (CEWH), is positive new for Australian dairy farmers.
The Australian Dairy Industry Council (ADIC) has lobbied hard for increased flexibility for the CEWH in optimising environmental outcomes in ways that
ensure dairy producers have better access to water supplies. Dairy has proved a flexible and responsible user of water. We have adapted our practices
to be more water-efficient. However, reduced access to water resources is already putting pressure on dairy’s productivity and profitability. This
CEWH flexibility is key to helping our industry remain viable. It will also ensure a balanced approach to achieving environmental outcomes in the Murray
The Government’s stated commitment to continue to work towards achieving a total 650GL supply offset is also positive. Achieving the full amount through
environmental works means more water stays in the irrigation pools.
Chair of the ADIC’s Basin Taskforce, Daryl Hoey described the response as a positive first step but highlighted greater improvements in the implementation
of the Act and the Murray Darling Basin Plan are still required.
“That the Government didn’t agree with the submissions of many to amend the Act to unambiguously state a triple-bottom-line objective or to strengthen
the current implementation of the legislation is of concern. Such an approach is critical,” Mr Hoey said.
“It’s good to see the Government amend timelines to some evaluations and reviews under the Act. We now need such revisions to be applied to all elements
of the Act.
“In particular, there is a need for a robust evaluation of environmental, economic and social impacts before considering an additional 450 gigalitres (GL) of water being taken from agriculture.”
To see the ADIC submission to the Water Amendment Bill 2015 click here.
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.