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.
Acting ADF President
Sep 09, 2016
Recent data on global dairy prices shows a positive rise that looks as if it might continue.
The average price in the Global Dairy Trade auction overnight rose by 7.7 per cent. This followed two consecutive rises in the past month, with a 12.7
percent increase in prices at the most recent auction, while the important whole milk powder (WMP) price rose by 3.7 per cent.
These results have driven the index to an 18 month high.
Analysts are predicting further rises in the global milk price which suggests that the worst might be behind us and we may start to see some stability return to the global milk supply. This will hopefully occur through rebalancing of supply and demand due to cut backs in EU production, intervention buying of SMP (skim milk powder) in Europe and increased buying in China.
Although these increases are nowhere near enough to return to sustainable prices it is pleasing to see that prices are on the rise and things may be looking better in the long term.
Unfortunately, the most optimistic scenarios see the market turning in any meaningful way in the first quarter of 2017.
As dairy farmers we have a limited capacity to manage the market price so it is important to always focus on what we can manage, remain aware of industry risks and maintain a low cost production system so we are in a better position to weather any storms.
While we are an industry that has been under intense pressure, we are also an industry that has the know-how and resilience to overcome adversity and thrive in the long term.
ADF, together with our state members, is continuing to fight for farmers. Even though we won’t be able to solve all of the issues farmers are facing, we are working to relieve some of the pressures to create change to ensure that an unfair share of the risk in the value chain is not taken by the farmer and that recent events in the industry don’t happen again.
Collaboration is the key to get us where we need to be. Our industry relies on all the elements to operate effectively. Farmers need processors and vice versa – so the solutions require all of us to come together to ensure a positive future.
While we wait for the uptick in prices we must remember that we are a resilient industry with a long, sustainable future ahead and our profitability depends greatly on the continued support of the Australian public.
It is important to remind the community that dairy farmers – regardless of the challenges they face are good business people, who care for their cows, work to enhance the well-being of their people and that every efficiency we make on farm has ties to minimising our impact of the environment.
To view the global dairy price index [click here]
Acting ADF President
Apr 11, 2016
The Agribusiness Outlook Australia event will explore the strategies for primary producers to access and leverage the global demand for Australian produce. With sessions exploring how to access overseas markets, how to establish a reputable brand, and how to strategically position your organisation for success, this event will provide a platform to share best practice examples, innovative approaches and other strategic ways to secure a profitable and productive future.
Apr 04, 2016
2016 is proving to be a challenging year for dairy farmers. Australian Dairy Farmers (ADF) recently visited members in New South Wales, South Australia and Western Australia, and across the country farmers are confronted with low milk prices, increased input costs, and dry weather conditions.
This continued volatility is a reminder of how dependent farming is on a lot of things which are outside our control.