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Economics & Trade, Farming operations, People & Community

Disaster response a state-by-state proposition

With around half Australia’s dairy farmers either battling a crippling drought or rebuilding after floods, there’s a lot to unpack when it comes to governmental responses around the country.

The most recent estimates of significant decreases in the Australian milk pool in regions impacted by drought and flood demonstrate that it is even more imperative that government’s get the response right.

Yet, that’s not what we’re seeing across the board.

While states like South Australia have done a great job engaging with dairy farmers and delivering fit-for-purpose support, unfortunately the response in other locations isn’t as inspiring or useful.

The South Australian government has taken a swift and coordinated approach to drought relief as conditions continue to worsen across the state.

It’s a positive example of how government and industry can work together to support farming communities during crisis. In contrast, many dairy producers in Victoria have expressed concern over the timeliness and delivery of assistance available in that state.

The South Australian Government has worked constructively with the agricultural sector to deliver meaningful, practical support to communities facing severe feed shortages, water insecurity and mental health strain.

Key elements of South Australia’s drought response include:

  • $55 million in targeted drought relief announced in April 2025, encompassing infrastructure grants, mental health services, and fodder freight subsidies.
  • $18 million in support announced in December 2024, focused on on-farm needs and longer-term drought resilience.
  • Freight assistance for fodder has provided critical cost relief for farmers transporting feed long distances, with hay prices exceeding $700 per tonne.
  • Consultation with regional stakeholders has ensured that policy decisions are informed by local conditions and farmer feedback.

South Australia has shown that when governments engage early and work closely with industry, the results are practical and immediate.

However, across the border, dairy farmers in South-West Victoria, Gippsland and Northern Victoria continue to face mounting challenges, with many now operating under drought conditions for two consecutive seasons.

New South Wales faces two challenges – the state’s southern dairying regions are dry, while on the northern coast dairy farmers are rebuilding after one-in-500-year flooding.

The State Government’s flood response was another good example of how governments can act swiftly to help farmers.

A natural disaster was declared quickly and financial support flowed swiftly to dairy farmers. It wasn’t perfect, and ADF publicly raised the need for increased support, but it was relatively efficient.

With farming organisations and the NSW State government now applying to the Commonwealth for ‘Category D’ Disaster Recovery Funding assistance, it is hoped the Federal Government will act quickly and decisively in granting this recovery funding for primary producers and dairy farmers in Northern NSW.

Meanwhile in South-West Victoria, the drought is the worst since records began.

While the $37.7 million Victorian Drought Support Package announced last month is a welcome development, concerns remain around its effectiveness on the ground.

There are several challenges in Victoria. Firstly, an absence of targeted fodder freight support is placing significant financial strain on farmers already facing elevated input costs.

Processing delays at saleyards and abattoirs intensified pressures to manage livestock, further compounding the drought’s impact.

An overarching issue is the limited engagement with dairy farmers during the package development phase, which raises questions about how well the programs reflect on-farm realities.

ADF encourages the Victorian Government to consider greater collaboration with local agricultural sectors, and to ensure that delivery of support is both timely and tailored to the needs of regional communities.

Both South Australia and Victoria are home to some of Australia’s most productive dairy regions – now among the hardest hit by prolonged dry conditions.

The drought conditions, however, are not unique to Victoria or South Australia.

Across many farms in southern dairying regions, pasture-based feeding has been abandoned entirely, replaced by expensive supplementary feeding strategies.

Input costs, especially for hay and feed, have risen by more than 50% year-on-year. Farmers are reporting weekly feed bills exceeding $25,000–$30,000.

Milk production is dropping, while stress and fatigue among farming families continues to grow.

Drought is a national issue, but the response shouldn’t depend on which State you farm in.

South Australia and NSW have set strong examples, and I encourage all governments to match that level of responsiveness and partnership.

I also urge the Victorian Government particularly to enhance its approach – by increasing coordination with both the sector, introducing targeted freight relief, and working with the Commonwealth on greater Disaster Relief Funding.

By Ben Bennett, President, Australian Dairy Farmers
Column originally published in ACM Agri publications.

Economics & Trade

Dairy weathering a perfect storm

Australia’s dairy farmers are facing an unprecedented dual crisis and need urgent, meaningful support from governments.

Nearly half of the nation’s dairy farmers are grappling with drought conditions. For some, it’s the worst since records began.

Meanwhile, more than 100 dairy farmers in New South Wales are cleaning up after a 1-in-500 year flood.

The devastation left by these extreme weather events, combined with lacklustre new season milk prices and high input costs, creates a perfect storm of challenges that threaten farm viability and Australia’s food security.

Dairy farmers in South Australia and South West Victoria are battling the worst drought on record. It’s also hitting hard in northern Victoria, Gippsland and extending into NSW.

Traditionally high rainfall zones are now parched, leaving farmers struggling to feed and water their cattle.

The economic toll on farmers is staggering.

Those affected by drought face exorbitant costs to secure feed and water for their cattle. Hay prices have surged by up to 54% year-on-year.

Meanwhile, flood-affected farmers have lost cattle, fodder, fencing, infrastructure, electricity, communications, and access to their properties.

In both instances, there is an immediate need for support and it’s critical to ensure farms survive.

Milk production is declining as farmers are forced to de-stock and reduce herd sizes due to the lack of feed and water.

The backlog at abattoirs and saleyards means some farmers are waiting weeks to offload cattle, despite not being able to feed them at home.

The ramifications of decisions being made over the coming weeks and months will be felt for years to come, as herds take time to rebuild.

Meanwhile the emotional toll on farmers cannot be overstated.

The pressure to keep their cattle healthy amid these crises is immense, leading to increased stress and mental health challenges.

The shortage of feed, fodder, and hay has forced farmers to source supplies from as far away as Queensland, adding to their logistical and financial burdens.

No price respite in site

Despite these multiple disasters, milk prices remain low, largely due to supermarket pricing strategies.

Dairy processors have just revealed their modest prices for the new milk supply season.

To borrow the catch phrase the processors used last year, we continue to see domestic prices disconnected from international markets – and not in a good way – as this year Australian processors’ prices lag well behind international markets and competitors such as New Zealand.

We also recognise they’re hamstrung by our big supermarkets.

When a cyclone hits, the price of bananas rises within weeks. Yet when nearly half Australia’s dairy farmers are hit by drought or floods, milk sells for the same low price every day in the supermarket.

Time to show up

What really grinds farmers’ gears when they’re facing such immense pressures is the government’s narrative that such natural disasters are unpredictable, yet farmers should be “prepared” and “resilient”.

It’s nonsense. What they’re really being asked to do in this instance is prepare for both a 1-in 500 year flood and the worst drought in memory.

What is unpredictable is whether our governments will show up when the people who feed them are on their knees.

You can’t manage climate change with media spin and a loan scheme no one can access.

If you want self-reliance, give us policies that actually work in the paddock – not just in Parliament.

The dairy industry is calling for immediate and meaningful support from the government to help farmers navigate these extreme conditions.

There are several key actions that can be taken in both the short- and long-term to provide relief and build resilience.

In the short term, we’d like to see the activation of “Category D” disaster support under the National Emergency Management Agency’s arrangements.

This measure would pave the way for farmers to receive low interest loans or cash grants to help with the costs of bringing in water and feed.

Additionally, the government can boost the supply of feed available by underwriting the import of feed from overseas to boost supply and help farmers get through the spring.

We’re not asking them to buy the feed – just to provide some certainty to importers and give them the confidence needed to direct ships our way.

The industry sees palm kernel extract (PKE), as one good alternative feed source. It’s already shipped in great quantities to New Zealand.

In the longer term, we seek support to address the root causes of the challenges we face this season.

One urgent need is action on water infrastructure projects such as stock and domestic water pipeline for South-West Victoria.

This is a proposal we’ve been taking to government for almost a year now, and for which we have seen funding to renew work on the existing business case

However, what industry really need from both state and Federal Governments is a genuine public commitment to co-funding the project.

If government is genuine about national food security, preparedness and resilience, this is one infrastructure project that will give hope and confidence to farmers to keep investing in the largest dairy producing region in Australia.

By Ben Bennett, President, Australian Dairy Farmers

Column originally published in ACM Agri publications.

Farming operations

Secure our water, secure our future

As a dairy farmer and President of Australian Dairy Farmers (ADF), I know our industry is under significant pressure on many fronts.

Australian milk production has tumbled from about 11.3 billion litres in 2001–02 to just 8.3 billion in 2023–24. That’s a 26 per cent decline.

Over that time, the number of operating dairy farms has decreased from around 13,800 to just 4500 – a 67% decrease.

This dramatic reduction reflects mounting pressures on the industry – including water shortages, rising input costs, regulatory burdens, and volatile milk prices.

We need investment to stop this decline and support our dairy farmers and the rural communities that depend on us.

ADF recently released five investment priorities to help our industry, and while each priority is important, water security is the most urgent for so many right now. Without reliable water, none of our other efforts can succeed.

Across South Australia and Victoria, dairy farmers are enduring a crippling water crisis. Parts of South Australia face unprecedented drought conditions – the worst in living memory​.

Previously green areas now suffer empty dams and scorched paddocks, with major reservoirs down to about 38% capacity.

This drought has already wiped billions from the South Australian economy and is ravaging parts of Victoria, particularly in the South West.

While farmers are making do – purchasing feed and taking other measures – support is crucial to sustain this vital sector.

A lifeline for farmers

In response, ADF has released its election priority ask, championing a $200 million Dairy Industry Water Offset Program – a three-year initiative to secure water specifically for dairy farms​.

This program would fund practical measures to help farms adapt to drought and competing water demands.

It focuses on using recycled water and aquifer recharge to diversify water supply, ensuring water from buybacks is returned to dairy farmers, building better infrastructure to reduce losses, and supporting adoption of more efficient technology.

By boosting efficiency and tapping new water sources, we can maintain milk production without praying for rain.

This is effectively an insurance policy for our industry’s future – strengthening drought resilience and supporting the rural communities around them.

Act before it’s too late

Despite recent State Government assistance, current policies are not keeping pace with the crisis on our farms.

Drought relief has been slow and modest – and farm aid claims have taken weeks to process. We must cut through this red tape. When a farm has only a few weeks of water left, support needs to arrive in days, not months.

If we fail to act, we risk Australia’s food security and the social fabric of rural towns.

Every dairy farm lost means less local milk on our tables and fewer jobs in country communities.

Our leaders must recognise these stakes – now is the time to commit to real support.

I’m not here to point fingers – we need action and investment, not just words. With strategic support, our industry can remain resilient and continue to bolster Australia’s food security​.

Less water means less milk

Change is also needed in the Murray-Darling Basin, where water policies may be well-intentioned, but are leaving dairy farmers in the lurch.

More water buybacks are looming, promising to further shrink the pool of water from which dairy farmers can produce milk.

We can’t keep removing water from production without offsetting the loss.

Programs like ADF’s proposed Water Offset initiative fill that gap by giving farmers the tools to cope with less water.

Our message to government is clear – secure our water, and we secure our future.

By acting decisively now through funding the Dairy Industry Water Offset Program and cutting needless obstacles we can keep the milk flowing for generations to come.

This means Australian dairy on family tables, farms passed to the next generation, and vibrant rural communities.

It’s time to step up – our nation’s food future depends on it.

By Ben Bennett, President, Australian Dairy Farmers

Column originally published in ACM Agri publications.

Economics & Trade, Farming operations, People & Community

Calls for government to invest in dairy future

Just as dairy farmers naturally look to change as an opportunity to innovate, Australian Dairy Farmers (ADF) this week launched its suite of shovel-ready commitments for the Federal Election.

With Australia’s dairy industry at a critical juncture, ADF calls on the Federal Government to reinvigorate dairy production, help modernise farm operations and strengthen regional dairy communities.

Dairy farming is a cornerstone of regional economies, driving jobs, innovation, and sustainability through modern farming practices.

Despite consumer demand for our nutritious product, farmers are battling declining production, high input costs and operational barriers.

ADF’s 2025 funding priorities provide targeted investment to secure the industry’s future, ensuring farm succession, efficiency, water security, and digital innovation.

With strategic government support, Australian dairy can remain competitive, sustainable, and resilient. This will help to boost national food security and strengthen rural communities.

ADF’s cohesive policy priorities recognise that dairy farming is more than just milk production—it provides essential nutrition, drives jobs, supports service industries, and fosters innovation through new technologies and modern workforce practices.

Attracting new farmers and encouraging reinvestment in the sector will help lead to greater productivity, enhanced sustainability, and stronger regional economies.

As dairy production prospers, so do the towns, businesses, and services that rely on it.

To make this vision a reality, ADF is calling on government to invest $399 million across five election priorities detailed below.

ADF 2025 Election Priorities

Australian Dairy Farm Fund is a $120 million initiative aimed at supporting the next generation of dairy farmers. This fund will help new farmers purchase their first farm, transition into family operations, and invest in modern, sustainable infrastructure.

The fund specifically targets those with limited access to capital or cash reserves. Without this support, generational renewal will continue to fall, farm closures will continue, threatening Australia’s national milk supply and regional economies.

Australian Dairy Farm Efficiency Rebate offers up to a 70% rebate on eligible on-farm reinvestments aimed at improving resilience and adopting sustainable, energy-efficient technologies. Costed at $50 million program over three years, rebates will be applied to renewable energy systems (solar panels, wind and battery storage systems), energy-efficient equipment and machinery.

This tackles one of the biggest barriers to dairy farm sustainability and profitability—energy inefficiency. Rising energy costs are a major contributor to reduced sustainability adoption.

Supporting on-farm reinvestment ensures a more competitive, efficient, and future-proof dairy industry.

Dairy Industry Water Offset Program is a $200 million, three-year program dedicated to addressing water scarcity. This is a growing national challenge that poses significant risk to Australian dairy farmers, particularly in the Murray-Darling Basin and other drought-prone regions.

Key initiatives include investing in alternative water sources like aquifers, recharge systems, and recycled water to diversify supply. Strategic water entitlement returns from buybacks to farmers will ensure dairy farms in high-impact regions receive equitable and reliable water access. Developing dairy specific pipelines, pumping stations, and shared infrastructure will reduce losses and boost drought resilience. This program will also fund advanced water capture, storage, high-efficiency irrigation, and smart monitoring.

Dairy Farm Digital Adoption Program is a $15 million small grant initiative designed to fast-track the adoption of farm automation and digital solutions in dairy farm operations. Research shows 70% of dairy farms lack automation. This program provides grants for smart technology adoption, robotic milking, herd monitoring, and digital workforce tools.

These digital tools enhance workforce management, can improve on-farm safety, and help address critical labour shortages.

Australian Dairy Farmers Industry Services is a $14 million three-year program to strengthen ADF’s ability to deliver vital services to dairy farmers, including biosecurity, workforce support, and industry investment initiatives. As farmers face rising costs, labour shortages, tightening regulations, environmental pressures, and biosecurity threats, ADF’s industry good services and leadership is more vital than ever. With farm numbers declining and investment shrinking, strengthening ADF’s capacity to support dairy farmers is crucial.

For more information on our election package, click here.

By Nathan Pope, Policy Manager, Australian Dairy Farmers.

Economics & Trade

Watchdog delivers dairy advocacy win

One of the dairy industry’s major long-held wishes was realised last week, at least in part, with an announcement from Australia’s competition watchdog.

Increased scrutiny of supermarket conduct will be in the Australian Competition and Consumer Commission’s (ACCC) crosshairs next financial year.

That welcome announcement was included in the organisation’s compliance and enforcement priorities for the coming financial year, announced at a business event in Sydney.

It’s an outcome Australian Dairy Farmers (ADF) has long advocated for.

The focus comes at a crucial time as dairy farmers grapple with increasing costs of production and declining farmgate milk prices, while supermarket profit margins remain strong.

With Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasting a $740 million decline in milk production value, driven mainly by lower farmgate milk prices, the need for equitable treatment across the supply chain has never been more urgent.

The ACCC’s 2025–26 priorities include addressing anti-competitive behaviour and misleading pricing in the supermarket sector. This directly aligns with ADF’s call in the mandatory Food and Grocery Code of Conduct consultation.

ADF’s submission to the Treasury’s Grocery Code Review highlighted the inherent power imbalance between supermarkets and suppliers.

We successfully argued that a mandatory code would provide greater price transparency, enforce accountability on retailers, and protect farmers from unfair trading practices.

The ACCC’s commitment to now addressing supermarket market power confirms that our advocacy is delivering real outcomes for Australian dairy farmers.

ADF has long called for regulatory intervention to prevent major supermarkets from wielding excessive influence over pricing and supply arrangements. Our submission highlighted several key recommendations, including:

  • Making the Grocery Code mandatory to ensure compliance from retailers;
  • Preventing supermarkets from using milk as a ‘loss leader’ to unfairly attract consumers while squeezing supplier margins; and
  • Ensuring that retail pricing strategies do not result in further reductions in the price of raw milk paid to farmers, which risks accelerating the decline of Australia’s dairy industry.

The ACCC’s newly stated priorities validate ADF’s position.

The regulator has committed to investigating misleading supermarket pricing practices.

With Coles and Woolworths controlling around 65 per cent of Australia’s grocery market, their dominant position has long created uncertainty for dairy farmers trying to plan their businesses in a volatile environment.

The farmgate milk price has declined while production costs remain high, putting immense pressure on producers.

The ABARES report confirms that lower milk production values are primarily a result of falling farmgate milk prices, underscoring the urgent need for supermarket accountability and fair distribution of profits across the supply chain.

ADF will continue to work with the ACCC, Treasury, and government to ensure regulatory reforms benefit dairy farmers and secure a more sustainable future for the industry.

We remain committed to ensuring supermarkets engage in fair pricing practices that do not disadvantage dairy farmers.

We do this while also advocating for stronger enforcement mechanisms that hold retailers accountable for market manipulation, allowing dairy farmers to get on with delivering nutritious products to Australian consumers.

The ACCC’s shift in focus is a testament to the strength of strong, targeted advocacy.

However, this is just the beginning.

We urge policymakers to move swiftly in implementing good policy, done well. This will ensure all players in the dairy supply chain receive a fair share of returns.

For dairy farmers, fair competition is not just a policy goal – it’s a necessity.

By Paul Mumford, Trade & Economics Policy Advisory Group Chair, Australian Dairy Farmers

Animal Health, Animal Health, Farming operations

Dairy beef: a growing market for Australian farmers

By Ben Bennett, President, Australian Dairy Farmers

The Australian dairy industry stands to gain more than $550 million per year at a conservative estimate, thanks to a promising growth opportunity being pursued by industry leaders.

That opportunity comes from increased profit and yield through developing the dairy beef industry and expanding into premium markets.

It was the hot topic at Australian Dairy Farmers’ (ADF) recent industry breakfast at International Dairy Week (IDW), where Professor Jane Quinn from Charles Sturt University and Dairy Australia’s Andy Hancock shared their insights.

They proved surplus dairy calves are no longer an issue to be managed, but an asset with substantial economic potential.

For too long, male dairy calves have been undervalued, often sold at low prices as vealers.

However, the CalfWays Sustainable Dairy Calf Management Roadmap aims to change this by facilitating the development of opportunities for Australia’s surplus calves to enter commercial supply chains by 2035.

The shift is already happening, and with the right structures in place, dairy beef has the potential to significantly enhance farm profitability.

Rising international demand

One of the most compelling opportunities for Australian dairy beef lies in export demand from the United States, where dairy-sourced beef plays a crucial role in the production of ground beef and burger patties.

The US beef industry relies on lean beef trim from dairy cattle to mix with fattier cuts, producing a high-quality, consistent product for food service and retail markets.

Currently, Australia exports a significant volume of lean beef to the US, but much of it comes from grass-fed cattle.

With dairy beef offering similar lean characteristics and a predictable supply chain, there is a clear opportunity for Australian dairy farmers to tap into the well-established US demand for ground beef.

The US market has already embraced vertically integrated dairy beef supply chains, processing around 90,000 calves per year under structured feeding and finishing programs.

New Zealand also exports significant quantities of dairy cattle for beef consumption to the US.

These systems provide farmers with stable pricing and a guaranteed market – a model that Australia can replicate to secure long-term demand.

Strong margins, viability

The financial potential of dairy beef is large.

Research presented by Professor Quinn at IDW shows that integrating surplus dairy calves into beef production has the potential to deliver $550 million per year through increased profit and yield.

Currently, many surplus calves are sold at around $35 per head as vealers, but with proper finishing, they can be grown out to reach carcass weights of 300 kilograms or more, with market values ranging between $1500 and $1800 per head.

The numbers clearly illustrate that dairy beef is not just an ethical solution – it’s an economically viable one.

A key factor in this shift is the Meat Standards Australia (MSA) grading system, which has shown that well-finished Holstein and Jersey cattle can produce beef of comparable eating quality to traditional beef breeds.

Consumer sensory trials show that dairy beef, when raised with the right nutrition and growth pathways, performs well in terms of tenderness, juiciness, and flavour, making it a valuable addition to the beef supply chain.

At IDW, Professor Quinn said trials conducted in western Victoria and the Riverina had proved that Holstein cattle can achieve growth rates and carcass characteristics on par with traditional beef breeds when finished in feedlots.

This means that with the right investment in breeding, feeding, and processing, dairy beef can meet both domestic and export market standards.

Building the supply chain

To capitalise on this opportunity, a coordinated effort is needed across the supply chain.

Programs like CalfWays, which has engaged over 150 stakeholders including dairy and beef processors, Meat and Livestock Australia (MLA), and major retailers, are helping to build stronger connections between producers and buyers.

The long-term goal is to develop a structured, profitable dairy beef industry that provides stability for farmers while addressing broader sustainability and animal welfare concerns.

Lessons from international markets, particularly the vertically integrated model from the US, show that with the right partnerships and investment, dairy beef can become a valuable and predictable revenue stream for Australian farmers.

The future is dairy beef

The dairy beef industry is at a turning point. Demand is growing, margins are strong, and global markets – particularly in the US – are actively seeking supply.

This is no longer a theoretical discussion; dairy beef is already proving to be a workable and profitable possibility for farmers willing to invest in structured growth programs.

At IDW breakfast it was clear: the future of dairy beef in Australia is bright.

By treating surplus calves as a business opportunity rather than a byproduct, farmers can unlock significant value, increase resilience, and contribute to a more sustainable and profitable dairy industry.

Now is the time to act. With the right partnerships, market connections, and investment in quality production, Australian dairy farmers can take full advantage of this growing sector.

 

Policy & Advocacy

Canberra gives cause to celebrate

By Ben Bennett
President
Australian Dairy Farmers

When this magazine lands in your letter box it’ll be the middle of summer and many in Canberra will be taking a break.

While that’s not so easy for dairy farmers to do, we can rest a tad easier knowing agriculture had two wins at the end of the Parliamentary sitting year.

In the Parliament’s last sitting week, a government move to tax ‘unrealised gains’ failed to pass the Senate.

Another key win, and something ADF had been a vocal proponent of, came when the beefed-up Food and Grocery Code passed Parliament – also in its final week.

Firstly, the unrealised gains tax was of significant concern to ADF for a number of reasons. Not least because it was unfair to dairy farmers and set a dangerous precedent.

The legislation would’ve reduced superannuation tax concessions for individuals with balances exceeding $3 million.

For farmers, whose assets are typically tied up in land and machinery, this could’ve meant selling off parts of their livelihood just to pay a tax bill on paper profits that don’t translate into cash flow.

ADF joined the National Farmers Federation and many other organisations in highlighting that taxing unrealised gains could have unintended consequences for investment and retirement planning, particularly affecting those who are asset-rich but cash-poor.

The collective advocacy efforts gained significant traction in the media and among policymakers, and clearly had an impact.

The core issue was in the nature of farming and small business assets.

Unlike liquid assets, such as stocks or cash, the value of farmland, equipment, and infrastructure is not easily accessible without selling the asset.

For many farmers, their superannuation is intrinsically linked to the value of their farm.

Taxing unrealised gains would have forced them to liquidate essential assets, disrupting operations and threatening the long-term viability of their businesses.

Mandatory code legislated

The other key win we noted in Parliament’s last days for 2024 was the passing of the changes to the Food and Grocery Code (FGC).

We knew earlier in the year that the Government had committed to implementing all 11 recommendations contained in the independent review of the FGC, led by Dr Craig Emerson.

But to see the changes make their way into legislation is satisfying, to say the least.

Throughout the review process, ADF called for the FGC to be made mandatory, to help create a level playing field for all suppliers.

The mandatory code promises significant benefits for dairy farmers by ensuring fairer trading practices and enhancing protections within grocery supply chains.

While there are moves afoot with the Dairy Code of Conduct, as you’ll read in my other piece in this edition, the Dairy Code of Conduct remains in place as an independent code and continues to regulate conduct between dairy farmers and processors.

It’s important the Dairy Code prevails as the standalone code regulating processers and dairy farmers.

It’s always pleasing to end a year with such good news. With both a review of the Dairy Code and a Federal Election ahead this year I hope I can be in the same position again when 2025 draws to a close.

Economics & Trade, Farming operations

Processors profiting from low prices

By Ben Bennett, President, Australian Dairy Farmers

As a dairy farmer, it’s infuriating to witness the blatant disregard processors have for the backbone of this industry – us, the dairy farmers.

Recently, some processors announced modest increases in their farmgate milk prices. For Fonterra, as an example, this is less than a two per cent increase.

It’s a move the company’s dairy farmers in Australia were right to celebrate.

But there’s a blatant double standard at play in how processors set prices, which is clearly evidenced by the discrepancy between farmgate prices in Australia and New Zealand.

Across the ditch, last month Fonterra upgrade its mid-point milk price forecasts for suppliers in New Zealand to a record NZ$10 per kilogram of milk solids.

This equates to around AUD$9/kgMS in our currency. The co-op says this “reflects strength in the global market”.

As I write this, Global Dairy Trade’s (GDT) price index is up almost 14pc since early July.

Yet other processors drag their feet, refusing to pass on any benefits to the people who work so hard each and every day to produce the milk that keeps their operations afloat.

This is a complete double standard when compared to the lead-up to the current milk supply season.

In early 2024 the Australian Dairy Products Federation (ADPF) and processors were going to lengthy efforts to collectively manage market price expectations that prices should decrease in line with overseas prices.

They warned that milk price decreases were necessary due to lower overseas prices and pointed to New Zealand and the GDT as evidence.

Ironically, now as prices start increasing overseas in NZ and on the GDT we do not hear the same rhetoric or willingness to increase prices accordingly.

Instead, ADPF stated the need to “work together” and the importance of unity within the industry. But where’s this camaraderie when it comes to fair compensation?

Their rhetoric about collaboration rings hollow when processors prioritise their profits over the livelihoods of farmers. It’s a classic case of all talk and no action.

I have been vocal about the challenges we dairy farmers face, pointing out supermarkets’ aggressive pricing strategies, like slashing home-brand milk prices and the immense pressure on farmers, squeezing us out of business while retailers boast soaring profits.

Yet, processors seem content to let dairy farmers bear the brunt without offering any relief.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) reported in its December Agricultural Commodities Report a staggering forecast of a $760 million loss in dairy production value in the current season.

Most of that drop directly relates to lower farm gate milk prices.

This isn’t just a number; it’s a devastating blow to our incomes, our families, and our communities.

While we’re left grappling with these losses, processors maintain their stranglehold on the industry, dictating terms and prices with little regard for farmers’ welfare.

If a loss of three quarters of a billion dollars was forecast in a financial year for any major Australian company, it would be all over the news and there would be calls for an investigation.

Yet this came and went with only Australian Dairy Farmers voicing concerns.

The power imbalance is glaring. Processors are the price-setters making decisions that impact our community’s livelihoods without any transparency or accountability, while farmers remain the price-takers.

Their reluctance to adjust farm gate prices, even modestly, underscores their market power and dominance.

Looking at the fundamentals that underpin this situation, the ABARES report suggests growth in global demand for dairy products will outpace global supply growth. Slowing production in China contributes to this picture.

Regardless of the cause, Australia’s dairy farmers know how supply and demand works.

It’s high time processors put their money where their mouth is. If they truly believe in working together, they must start by ensuring fair compensation for farmers.

Empty words won’t pay our bills or sustain our farms. We need tangible actions that reflect a genuine commitment to the wellbeing of the entire dairy industry, starting with those who are its very foundation.

Farming operations

Code at risk of rewarding those it shields us from

By Ben Bennett, President, Australian Dairy Farmers.

When the Dairy Code of Conduct was introduced on January 1, 2020, it wasn’t because everything in the dairy industry was working smoothly.

It was because farmers had suffered under a system that allowed processors to wield disproportionate power – leaving us vulnerable to retrospective price cuts, unfair contracts and a complete lack of transparency.

The Code wasn’t a gift from processors; it was a necessary response to their unscrupulous behaviour.

Fast-forward to today, and now the processors whose actions resulted in the need for the Code are suggesting changes to it. The irony isn’t lost on us farmers.

A Code designed to protect us from unfair practices is now under threat of being rewritten to better serve the processors. It’s not right, and it’s certainly not fair.

The Code was born out of years of hardship and frustration.

For many of us, the 2016 price clawbacks by major processors like Murray Goulburn and Fonterra are still fresh in our minds.

Coming off the back of the $1 milk wars, those unilateral price cuts devastated farm incomes, forced many out of the industry, and eroded trust, many would say forever.

In the wake of that crisis, the ACCC launched an inquiry that exposed the power imbalances between processors and farmers.

The mandatory Code was introduced to fix these issues by implementing:

  • Transparent milk supply agreements with minimum standards,
  • Clear pricing information published annually,
  • A prohibition on retrospective price changes and unilateral contract variations, and
  • Dispute resolution mechanisms to address conflicts fairly.

The Code was a step forward, but it’s far from perfect.

Farmers still face challenges, but at least we know there are rules to prevent the worst abuses of the past.

Over the past few years, dairy farmers have finally started to see some decent returns for their hard work.

Many of us have been able to reinvest in our farms, pay back loans, improve efficiencies, and breathe a little easier.

But now, as processors feel the pinch, they’re suddenly pushing for changes to the very rules that helped create some balance.

Let’s be clear: the Code exists because processors couldn’t be trusted to play fair.

Yet, they are the ones now trying to dictate changes to it.

Their proposed amendments—such as delaying pricing deadlines, increasing their flexibility to adjust prices mid-season, and weakening dispute resolution—are all designed to benefit them, not industry and certainly not farmers.

This push to move the goalposts is particularly frustrating because processors already hold the reins when it comes to pricing.

Processors decide the farmgate milk price, and as we’ve seen recently with a cut of 10-15 per cent in opening prices, they set those prices with little regard for how it impacts farmers.

Processors argue these cuts reflect global market realities, but farmers don’t have the luxury of such flexibility.

We have fixed costs, long production cycles, and depend on stable prices to keep our operations viable.

The Australian Dairy Products Federation’s argument for greater pricing flexibility sounds reasonable on the surface. They claim it would allow processors to respond better to market conditions.

But what does that really mean for farmers? It means more uncertainty. It means prices could be slashed mid-season, leaving us scrambling to make ends meet.

Farmers don’t have the luxury of adjusting our costs to match a processor’s new pricing structure.

Once a contract is signed, we commit to producing milk at the agreed price.

We invest in feed, herd management, and labour based on that commitment.

Changing the price during the season would leave us carrying all the risk while processors protect their margins.

The same goes for their push to delay pricing publication deadlines.

Currently, processors must publish minimum pricing by June 1 each year, giving farmers time to compare offers and make informed decisions.

Pushing this deadline back would only benefit processors, reducing competition and leaving farmers with less time to negotiate better deals.

Farmers are price-takers in this relationship, and we’re the ones who bear the brunt of market fluctuations.

When times are tough, it’s farmers who suffer. When times are good, as they have been for the past couple of years, processors seem unhappy that farmers are finally seeing a fairer share of the pie.

Let’s not forget farmgate prices this season are down 10-15pc, but international markets are up.

Farmers endure droughts, floods, increased cost of living and ever rising production costs. We’ve adapted, innovated, and kept this industry alive through sheer determination.

The Code isn’t perfect, but it’s a lifeline for farmers trying to build a sustainable future.

Giving processors even more flexibility and power would only push farmers further into uncertainty.

They shouldn’t get to rewrite the rules to suit themselves – especially when those rules were created to curb their past excesses.

To those that are doing the rewriting, walk a mile in our gumboots, make the decision to send cows you can’t feed to slaughter, watch them loaded on the truck, then see how writing Code changes from your desk feels.

The consultation on the Code will be a pivotal moment.

We can’t let processors dictate changes that benefit them at our expense.

The Code exists because of their behaviour, not ours. It’s there to protect farmers and ensure fairness in the supply chain.

The government must prioritise farmers’ voices in this process.

Strengthen the Code. Enforce the rules. And ensure that the dairy industry is a place where hard work is rewarded, not exploited.

Farmers deserve stability and fairness, not shifting goalposts designed to keep processors happy, while keeping farmers on the knives edge.

Economics & Trade, Farming operations, People & Community, Policy & Advocacy

Strengthening ADF for Dairy Farmers

By Ben Bennett, President, Australian Dairy Farmers

It is an honour to continue to serve on the Australian Dairy Farmers (ADF) Board and to remain as President.

I was re-appointed by members at ADF’s Annual General Meeting (AGM) last week, along with fellow directors David Beca and Heath Cook.

Together, we stay committed to standing for the interests of dairy farmers across Australia and ensuring that their voices shape national policy decisions.

The AGM highlights the power of our united voice and the strength of our farmer-led organisation.

I would like to thank Andrew Aldridge, a Policy Advisory Group (PAG) chair and National Councillor, who stepped up to contest the election, making it a competitive process through his candidacy.

Dairy farmers like Andrew, who actively contribute their time and expertise, ensuring that ADF focuses on key issues impacting dairy farmers across Australia while also providing a succession pathway through the organisation.

PAGs undergoing a refresh
ADF is in the process of refreshing its Policy Advisory Groups (PAGs) to ensure they meet the evolving needs of dairy farmers.

This process aims to strengthen the PAGs so they can more effectively translate on-farm concerns into actionable policies.

PAGs have been, and remain, a vital link between the grassroots issues dairy farmers face and the national policies ADF advocates.

Through this refresh we’ve seen strong interest from the farming community, with a number of nominations received.

This response shows the value dairy farmers place on having their voices heard and shaping the direction of the dairy industry.

These nominations bring great perspectives and reinforce ADF’s foundation as a farmer-driven organisation.

This refresh also focuses on improving collaboration between PAGs, State Dairy Farmer Organisations (SDFOs), National Council and industry stakeholders.

By streamlining processes and improving communication, ADF strengthens its ability to respond to the big challenges the industry faces, from regulation to climate resilience and securing fair farmgate prices.

Tackling big issues in 2025
The year ahead presents significant priorities for ADF.

The review of the Dairy Code of Conduct stands out as a critical task.

Ensuring fairness across the supply chain remains essential to supporting trust and transparency between dairy farmers, processors, and retailers.

With a Federal Government election on the horizon, ADF continues advocating for policies that support the sustainability, innovation, and profitability of Australian dairy farms.

These priorities reflect the need for long-term solutions to address the challenges dairy farmers encounter daily.

ADF also focuses on supporting the global competitiveness of Australian dairy.

Rising production costs, access to reliable water supplies, and the need for clear labelling laws require immediate attention.

Labelling laws in particular play a vital role in protecting the integrity of dairy products and ensuring consumers can trust what they buy.

Encouraging dairy farmer engagement
At the core of ADF’s work lies a commitment to the dairy farming community.

ADF relies on farmers, advisors, and advocates to actively take part in shaping the industry’s future. ADF encourages all dairy farmers to get involved.

Join your local SDFO, take part in PAG discussions, and share your voice. ADF’s strength comes from the collective effort of the farming community.

By working together, we amplify the voice of Australian dairy farmers and tackle the issues that matter most.

Moving forward together
As ADF enters 2025, I remain committed to leading with determination.

The challenges we face as an industry are significant, but so is the resilience and ingenuity of dairy farmers.

The Board, National Council and PAGs, combined with the strong participation from dairy farmers, sets a solid foundation for addressing the road ahead.

Together, we ensure that ADF stays focused on delivering real outcomes for farmers.

Whether it’s addressing rising costs, advocating for fair prices, holding processors accountable or ensuring a seat at key policy tables, ADF continues to represent the interests of every dairy farmer in Australia.

Here’s to a productive and purposeful 2025.

By standing united and actively taking part, we strengthen our industry and secure a strong future for Australian dairy.

Policy & Advocacy

ADF Notice of Annual General Meeting

Australian Dairy Farmers (ADF) members eligible to participate in its 2024 Annual General Meeting (AGM) should check their email inboxes for a Notice of Meeting (and enclosures).

The AGM will be held on Thursday, November 28.

Eligible members were sent a Notice of Annual General Meeting by email on Thursday, November 7 from Vero Voting.

The email from Vero contains all the information you’ll need to access the meeting pack and voting system.

Members having difficulty finding the email should check their junk or spam folder. If you are still having difficulty, please contact operations@australiandairyfarmers.com.au.

Economics & Trade, Farming operations, People & Community

Proposed super changes spark concern

By Ben Bennett, President, Australian Dairy Farmers

A government move to tax ‘unrealised gains’ has – quite rightly – ignited serious concerns among farming businesses, family enterprises, and small businesses across the nation.

In February 2023, the Australian Government announced plans to reduce superannuation tax concessions for individuals with balances exceeding $3 million.

This initiative aims to adjust the taxation framework of superannuation and is expected to significantly impact high-balance accounts.

The proposed legislation (Better Targeted Superannuation Concessions and Other Measures Bill) on unrealised gains—essentially taxing the increase in value of assets that have not been sold—could place undue financial burdens on dairy farmers.

Many of us rely on asset appreciation, particularly land value, for long-term financial stability and retirement planning.

As the National Farmers Federation (NFF) has warned – this unprecedented move could force farmers to sell parts of their farms to meet tax obligations, undermining the viability of family-owned agricultural enterprises.

It’s unfair and sets a dangerous precedent.

For farmers, whose assets are typically tied up in land and machinery, this could mean selling off parts of their livelihood just to pay a tax bill on paper profits that don’t translate into cash flow.

These apprehensions are echoed by several organisations, including the SMSF Association, the Tax Institute, the Financial Advice Association of Australia, and the Institute of Financial Professionals Australia.

They argue that taxing unrealised gains could have unintended consequences for investment and retirement planning, particularly affecting those who are asset-rich but cash-poor.

Clearly, Australian Dairy Farmers (ADF) supports this stance.

We’d like to see an immediate halt to the proposed superannuation changes, emphasising the detrimental impact they could have on dairy farmers.

Dairy farming, much like other agricultural sectors, involves significant investment in land and equipment.

The proposed tax could jeopardise the financial sustainability of these businesses, many of which are family-owned and operated.

As we know, dairy farmers already face tight profit margins and volatile market conditions.

Introducing a tax on unrealised gains would exacerbate these challenges, potentially leading to a reduction in investment in the sector and threatening Australia’s dairy production capabilities.

ADF welcomes the work of NFF in opposing the Bill, including its engagement with MPs and Senators, and their staff, as well as its collaboration with the Council of Small Business Organisations Australia (COSBOA) and the Family Business Association.

Together, they have developed a comprehensive document outlining their position, which has been distributed to lawmakers.

This united front aims to highlight the widespread concern over the potential impact of the proposed superannuation changes on small businesses and the agricultural sector.

The collective advocacy efforts have gained significant traction in the media and among policymakers.

The core issue lies in the nature of farming and small business assets.

Unlike liquid assets, such as stocks or cash, the value of farmland, equipment, and infrastructure is not easily accessible without selling the asset.

For many farmers, their superannuation is intrinsically linked to the value of their farm.

Taxing unrealised gains could force them to liquidate essential assets, disrupting operations and threatening the long-term viability of their businesses.

The proposed changes also raise concerns about intergenerational transfer of family farms.

With additional tax burdens, the ability to pass on the family business to the next generation becomes more complex and financially challenging.

This could lead to a decline in family-owned farms, which have been integral to Australia’s agricultural heritage and rural communities.

The NFF, ADF, and our allied organisations are calling on the government to reconsider the proposed changes and to engage in meaningful consultation with affected stakeholders.

We need policies that support the sustainability and growth of farming businesses and small enterprises, rather than imposing additional financial burdens.

In response to the growing opposition, some Parliamentarians have expressed willingness to engage in dialogue.

The hope is that through collaborative efforts, a more equitable solution can be found that addresses the government’s objectives without disproportionately impacting farmers and small business owners.

The debate over the proposed superannuation changes underscores the delicate balance between policy objectives and the practical realities faced by different sectors of the economy.

As the Bill moves through the legislative process, it is crucial for lawmakers to consider the far-reaching implications and to ensure that the voices of those most affected are heard.

It is imperative that policymakers carefully evaluate the proposed changes to avoid unintended consequences that could undermine the financial stability of farming industries and our hard-working dairy farmers.

The farming community and small business sector remain hopeful that through continued advocacy and engagement, the government will acknowledge these concerns and adjust the proposed legislation accordingly.

 

Economics & Trade, Farming operations

Drought plan must support fragile sector

By Ben Bennett, President, Australian Dairy Farmers

Dairy farmers in south-west Victoria, South Australia, Western Australia and Tasmania know all too well the immense challenge drought presents to the industry.

In these parts of the world, particularly south-west Victoria where farmers are battling the driest season on record, farmers are struggling.

So Australian Dairy Farmers’ (ADF) recent joint submission to the Department of Agriculture, Fisheries and Forestry’s (DAFF) consultation on the Australian Government Drought Plan is well timed.

Of course, the submission won’t make it rain and won’t deliver immediate change. But it does push to address the needs of dairy farmers.

Supporting the strong submission by the NFF, and prepared in conjunction with Dairy Australia, it calls for a number of essential changes to safeguard the dairy industry’s future.

Clear criteria in drought phases

One of the primary changes we outlined as important is the establishment of clear criteria for transitioning between the phases of the drought cycle.

The ambiguity around current definitions leaves a lot to be desired.

In south-west Victoria, farmers are experiencing the driest season on record yet aren’t considered to be in “drought”.

The lack of adequate recognition of the situation makes it too easy for governments and other institutions to believe it’s “business as usual”.

By specifying the environmental, economic, and social indicators that trigger each phase of the drought cycle, the government can ensure timely and consistent responses.

Recognising drought as a natural disaster

The submission strongly argues for the recognition of drought as a natural disaster.

Unlike other natural disasters, drought is a slow-onset event, but its impact on the dairy industry is no less devastating.

Dairy farming is uniquely fragile due to the high water and feed requirements of dairy cattle.

Establishing a threshold for recognising drought as a natural disaster would enable the provision of appropriate support to maintain animal welfare and milk production.

This change is crucial for preventing long-term productivity losses and ensuring the economic viability of the sector.

Emphasising evidence-based decision-making

Our submission emphasises the need for evidence-based decision-making in the government’s drought response.

The current approach lacks specific details on how government actions will be triggered by varying levels of drought severity.

By providing concrete examples and scenarios, the government can enhance transparency and preparedness.

This approach will also build trust with farmers.

Clarity on government support

We called for greater clarity on the specific actions the government will take during the ‘responding’ phase of the drought cycle.

Currently, the plan indicates that support is available at any time but lacks details on immediate measures to be implemented when drought conditions are identified.

Clear communication of these actions will help farmers understand what to expect and how to access the necessary support.

This transparency is vital for reducing the stress and uncertainty that farmers face during drought periods.

Enhancing coordination with state and territory support

Improved coordination between federal and state-level support is another critical change we proposed.

The current lack of coordination can lead to confusion and inefficiencies in drought relief efforts. This leaves farmers frustrated as they struggle to identify the right contacts and the appropriate times to discuss their situation.

By aligning federal and state measures, the government can ensure a more cohesive and effective response.

This coordination should also extend to the private sector, particularly the finance and banking industries, to ensure that support measures are timely and consistent across all levels.

Regular review and adaptation

The submission highlights the importance of incorporating mechanisms for regular review and adaptation of the drought plan.

Climate change is an evolving challenge, and the plan must remain relevant to address its impacts effectively.

Establishing a drought management advisory group could facilitate continuous assessment and adjustment of the plan based on new data and emerging trends.

This proactive approach will enhance the resilience and sustainability of the dairy industry in the face of changing climatic conditions.

Pushing for action

The changes proposed are not just recommendations; they are essential steps towards securing the future of the Australian dairy industry.

They reflect critical components of a robust drought plan.

Implementing these changes and those highlighted by the NFF, will provide the dairy industry with the support it needs to navigate the challenges of drought, ensuring its resilience and sustainability for generations to come.

Caption: ADF hosted Australia’s Minister for Agriculture, Julie Collins, at president Ben Bennett’s farm in early October.

Economics & Trade, Farming operations, People & Community

Dairy policy by dairy farmers

By Nathan Pope, Policy Manager, Australian Dairy Farmers 

Australian Dairy Farmers’ (ADF) commitment to farmer-driven policy is evident in the rigorous and responsive discussions held during our recent Policy Advisory Group (PAG) meetings. 

These meetings are not just routine; they are critical touchpoints where the experiences of our dairy farmers directly influence the policy direction of our organisation. The three PAGs are each led by dairy farmers. 

People and Communities PAG

Under Michele Lawrence, the People and Communities PAG has taken significant steps to address pressing issues impacting farms and communities. 

The decision to pursue ADF’s membership in FarmSafe was a key outcome of the group’s recent meeting. This move is particularly timely as the industry faces increasing scrutiny over farm safety practices.  

The membership allows ADF to leverage FarmSafe’s resources and expertise to enhance safety protocols across dairy farms, directly addressing the rising concern about workplace injuries and mental health challenges in rural areas. 

The PAG also discussed the working holiday maker visa review, highlighting the critical nature of this labour source for dairy farms, especially where seasonal labour shortages have been a persistent challenge.  

The group emphasised the need for ADF to advocate for visa conditions that are flexible enough to meet the demands of dairy farming while ensuring fair treatment for workers. 

In addition, changes to industrial relations laws, particularly those affecting casual and part-time workers, were scrutinised. The group expressed concerns about the potential impact on labour costs and the administrative burden on farm businesses.  

Farm Operations PAG 

The Farm Operations PAG, led by Andrew Aldridge, addressed several critical issues during its recent meeting, particularly in the context of emergency preparedness.  

A briefing from ADF’s water taskforce was a focal point of the meeting, with in-depth discussions on the implications of water policy reforms within the Murray-Darling Basin. 

There is concern among dairy farmers in that region about the long-term viability of their operations due to fluctuating water allocations and the rising costs of water. The taskforce provided updates on ongoing advocacy efforts, emphasising the need for a balanced approach that considers both environmental sustainability and the economic realities of farming.  

This briefing reinforced the importance of ADF’s role in lobbying for fair water distribution policies that support the dairy sector. 

The PAG also delved into antimicrobial labelling, with members noting the increasing consumer demand for transparency in food production. The discussion was framed around maintaining Australia’s high standards while avoiding unnecessary regulatory burdens that could disadvantage local producers in the global market.  

The group’s exploration of carbon trading and energy policy reflected dairy’s broader commitment to sustainability, recognising that these areas are not just regulatory challenges but also opportunities for the dairy industry to lead in environmental stewardship. 

Trade and Economics PAG 

Under Paul Mumford, the Trade and Economics PAG tackled several strategic issues with significant implications for the future of the Australian dairy industry.  

The announcement of Indonesia’s policy to provide free milk in schools was identified as an opportunity for Australian dairy exports. The group discussed how this policy could open new markets for Australian dairy products, particularly given the strong trade ties and the existing framework of agreements between Australia and Indonesia.  

The PAG recommended a proactive approach to engaging with Indonesian authorities, government and local dairy stakeholders to secure a significant share of this market, emphasising the need for competitive pricing and high-quality standards to meet the expected surge in demand. 

The declining milk pool was another critical issue on the agenda, with group analysing the factors contributing to this trend.  

The discussions were informed by data showing that rising input costs, changing consumer preferences, and increasing competition from plant-based alternatives are all exerting downward pressure on milk production.  

Members stressed the importance of policy interventions to reverse this trend, including measures to support farm profitability. 

National Council – bringing PAG outcomes together 

ADF’s National Council has met twice in recent months. Its purpose is to synthesise the outcomes of the three PAGs. 

These meetings were significant events, particularly in light of the upcoming reviews of Dairy Australia. These are important for the industry, as they will shape the strategic direction and effectiveness of our key research and development body.  

The council also reviewed updates on the Australian Dairy Sustainability Framework – a key initiative that tracks the industry’s progress towards achieving sustainability goals.  

The discussion highlighted the need for continued efforts to promote sustainable farming practices that are both environmentally sound and economically viable. The council emphasised sustainability is not just a regulatory requirement, but a core component of the industry’s value proposition to consumers and markets. 

Each of these five meetings helps inform ADF’s policy development process, driven by the insights and recommendations from our grassroots members.  

They help ADF advocate for policies that support the long-term success and sustainability of the Australian dairy industry. 

 

Caption: Australian Dairy Farmers’ three Policy Advisory Groups each met recently, along with two meetings of its National Council (pictured).  

Labour, People & Community

Farm safety: still more to do

By Michele Lawrence, People & Communities Policy Advisory Group Chair, Australian Dairy Farmers

Australia’s dairy farmers are committed to the safety and wellbeing of their people.

As an industry we’ve done a lot of work to build safe work culture and equip farmers with tools to assist compliance.

While there might be a silver lining in the latest statistics for dairy, it remains a serious issue, but as an industry we are proud of our progress in reducing injuries.

Fresh out of Farm Safety Week, Australian Dairy Farmers’ People and Communities Policy Advisory Group received a briefing from Farmsafe Australia.

Overall, it’s shaping up to be a bad year for workplace deaths and injuries in agriculture. But there are promising signs for dairy.

The presentation highlighted that agriculture makes up less than three per cent of Australia’s workforce, but accounts for nearly 30% of all workplace deaths.

Up to July 1, the industry had lost 30 people to workplace deaths this year. That compares with 32 deaths in Australian agriculture in 2023.

In the same time frame, 74 people in the ag industry had been injured while on-the-job, compared to 122 the year prior. This is not the trajectory we want to be on.

In case you’re not convinced that we need to do more to slow these numbers, here are a few more statistics Farmsafe Australia presented from 2023:

  • 9% of fatalities were children under 15 years
  • 12% of injuries were children under 15 years
  • 91% of fatalities were male
  • 86% of injuries occurred in New South Wales and Queensland

However, thankfully, dairy makes up a small component of these statistics.

That’s not to say we can take the foot off the pedal and become complacent. One death is too many.

There’s been a great deal of work done embedding a safety culture both across the industry, and also by individual farm managers.

But safety systems don’t make us safe alone. They help guide our daily thoughts and actions. Our actions on-the-ground are key, we need to balance compliance with on-the-ground action. Implementing simple systems can help us reach safer outcomes.

The farmers I know understand they and their teams are key to embedding a safety culture on-farm. If management don’t set a good example for their staff, the systems are compromised.

There is inherent risk in farming, including from working with animals, machinery and often working solo. But we can drive these numbers down through better ways of working.

Protecting those we care about

Farming has changed, and as businesses have grown farmers have recruited staff from outside their family unit.

Wherever I go, I see dairy farmers who care deeply about their staff – regardless of whether they started out as friends, family or strangers, from in-town or overseas.

Unfortunately, this is reflected in the statistics. Because of that care, farm owners and managers often take the dangerous jobs upon themselves.

Because they’re doing the dangerous jobs, the statistics show it’s the owners and managers who are more likely to be injured on-farm. They work to shield younger, less experienced staff from risk.

It’s never acceptable for someone to be injured or killed on-farm, but I take solace from the fact dairy farmers are continually improving their safety systems and the numbers for our industry are relatively low.

Resources available

Our industry has dedicated resources available to help improve your approach to safety.

Whether you need a farm safety starter kit, farm safety manual, workplace policies or safe ag systems, The People in Dairy website (thepeopleindairy.org.au) has it all. You can then document these approaches through the resources from Our Farm, Our Plan (gardinerfoundation.com.au/ofop).

Again, and thankfully, the statistics tell me that most farmers are using these resources and acting in the best interests of their staff, family and businesses.

Technology and new ways of working are also helping the industry reduce injuries through innovations like roll over protection on tractors. The same step-change is afoot for quad bikes.

On our farm, we provide workers with a safety induction that sets the tone and embeds our safety culture. For example, I get a text message when the tractor is being driven too fast; and that we follow best-practice, low-stress livestock handling practices. Each of these little things help build our level of safety resilience.

While we celebrate our achievements, we must remain vigilant.

The pursuit of safety is an ongoing journey, and complacency is our greatest adversary.

Continuous improvement, regular reassessment of safety practices, and the willingness to embrace new innovations are essential to maintaining and furthering our progress.

Importantly, it also helps everyone make it home safely from the farm each and every night.

This piece was published in ACM newspapers on Thursday, August 1, 2024.

Economics & Trade

ADF statement on live sheep export ban

Australian Dairy Farmers statement regarding the passing of legislation through the Federal Parliament to end live sheep exports:

Australia’s peak representative body for dairy farmers stands united with the livestock sector in opposing the Federal Government’s ban of live sheep exports by sea.

While the decision directly concerns live sheep exports, Australian Dairy Farmers (ADF) says the ban exposes a number of other sectors and international trade partners to significant trade risk.

This risk extends to the dairy industry and has the potential to adversely impact Australia’s dairy farmers.

ADF is concerned the views of a small segment of the Australian community has been empowered through Government policy and imposed on international cultures and trading partners. Australia is well placed to feed the world. We can’t do this with ill-informed Government policies based on emotion over fact.

Policy & Advocacy

Nuanced needs call for specialised advocacy

By Ben Bennett, President, Australian Dairy Farmers

Australia is full of many different professional, vocational and trade groups, each with their own representative bodies.

Farmers are similar, in that they have their particular commodity sectors, each with their own inherent production systems, array of associated inputs, markets, pests, diseases, and supply chain risks.

If you get a dairy farmer, a cropper, a wool producer and a grazier, from each of the six states, and put them together in a room, after the initial socialising they’re usually in their respective commodity groups by the second round of drinks.

It is not just a natural social community behaviour. You see it reflected across society and across industries, not just agriculture.

Whether it be professional advocacy associations, trades, research and development organisations or, dare I say it, unions.

Within agriculture, our production sectors are reflected across our different commodity supply chains, buyers, traders, transporters, processors, marketers, through to peak industry bodies, or different research and development corporations.

These sectors underpin the $81 billion generated across sectors in farmgate value in 2023-24, including $6 billion at dairy farm gates across the country.

Thats billions – these are significant figures!

They’re figures we would not realise if we did not have commodity-level representation, driving the hundreds of millions of dollars in investment for each sector

We’d not be able to realise this revenue if we didn’t have a strong cohort of dairy processors vying for our product.

We also need strong farmer and industry representation, as each commodity has a nuanced set of challenges.

The people on commodity representative boards have a variety of experiences and perspectives but are united by their common interest in their specific profession or commodity. That’s how they gain and maintain the backing of farmers.

If farmers lose confidence and feel these boards and bodies are not representing them, they can be ousted, sparking a change in focus.

Nuanced needs, challenges

Meanwhile, a concerning wave of power is washing over our businesses. It comes from government and within the dairy supply chain.

Governments are piling on the red tape for farmers, while major players in the supply chain consolidate and grow their operations.

Government regulation has traditionally been science-based. But we now see the very real influence of often fringe groups, representing a minority of the Australian population influencing policy particular in governments that lack a balance of power.

These groups or entities are politically intelligent and will play one party off against another.

It is the individual commodities who have their expertise and knowledge, which is second-to-none, that can push back with conviction on the “facts” and emotional gymnastics preached by these new groups.

In other sectors of the supply chain, the big players are being influenced by third parties demanding social licence.

Perception of social licence, or a lack of it, is usurping the due process of our democratically elected governments.

When these issues reach the media, industry is treated as being guilty until proven innocent, so it’s imperative we focus on this.

Empowered by the masses

Farmers still have the high ground. Let’s remember, an overwhelming majority of Australian consumers buy dairy products each week.

Consumers understand that it takes all sorts of different farmers to produce different parts of their diets – just as they know it takes all sorts of different professionals to provide personal advice and care through to tradies to fix their house and car

Yet all these professions, vocations and trades all have their own specialist professional associations.

These differences make us collectively stronger. Individual representation allows for a more specialised, nuanced, effective, and focused approach to addressing the needs and advancing the interests of each agricultural commodity group right around this large continent.

Putting all our representative groups into a blender and making a soup won’t deliver a dollar more to Australian farmgate incomes, yet it will put those very commodity sectors at far greater risk.

The argument goes that trying to dismantle all these specialist professional commodity bodies and roll them into one would save administrative costs. But it would also place at risk $81 billion in production.

Let’s allow the farmers to determine how they want to be represented!

This piece appeared in ACM Agri newspapers.

Uncategorized

Mastitis treatment under threat

By Ben Bennett, President, Australian Dairy Farmers

One of the active ingredients in popular mastitis treatment Mastalone is under threat, and Australian Dairy Farmers (ADF) is proactively defending farmers’ access.

Australia’s agvet chemical regulator, the Australian Pesticides and Veterinary Medicines Authority (APVMA), is reconsidering the registration of the antibiotic neomycin – one of the key components of Mastalone.

In real terms, this means the sale of Mastalone could be banned simply because of, as APVMA puts it, a lack of data to enable it to assess potential risks to trade from chemical residues.

ADF has made a submission to APVMA outlining the importance of this veterinary chemical product to dairy production in Australia.

As the national representative body for dairy farmers across the six dairying states, ADF’s mission is to improve the productivity and sustainability of dairy farmers in Australia. Critical to this mission is to maintain and improve Australia’s animal health and welfare systems.

The proposed decisions, if implemented, would change the conditions of registration and/or cancel the registration of Mastalone and other vital products.

In our submission on behalf of Australia’s dairy farmers, we reminded APVMA that mastitis is a painful disease, causing significant animal welfare and economic losses on every dairy farm, and that deregistration of this product would have a counter-intuitive impact on production and animal welfare.

Australian dairy farmers must be able to use Mastalone because it contains ingredients (Oxytetracycline, Oleandomycin and Neomycin) that are not available in other registered intramammary products and cover a broader spectrum of mastitis pathogens compared to other products.

Importantly, these medicines are of low importance to the development of human antimicrobial resistance.

Therefore Mastalone provides an important alternative product to other intramammary lactating cow products that contain beta-lactam active constituents. Dairy farmers need both tools in their toolkits to ensure their animals remain healthy and don’t develop resistance to either category of antibiotic.

ADF appreciates the APVMA’s responsibility to assess the efficacy, safety and risks to trade.

But we think it is deeply unfair that APVMA would propose to cancel the registration of Mastalone primarily due to a lack of data.

Mastalone has been used under veterinary prescription by dairy farmers in Australia for over 50 years. The industry has a very long, recorded history of successfully managing the risks of antimicrobial residues in both milk and meat products traded domestically and around the world.

Overall, the Australian dairy industry has a very low use of antibiotics compared to other countries.

We are proud of our industry’s efforts to use antibiotics sparingly and correctly, through which we minimise the risk of antibiotic resistance and protect our international reputation.

Through the Australian Dairy Sustainability Framework, the industry has committed to use antibiotics responsibly, as little as possible, as much as necessary, to protect the health and welfare of our animals.

Of its own volition, and through government systems, the industry has been monitoring for antimicrobial residues in its products for many years. If Mastalone posed a significant risk to consumers or trade it would have been identified through the industry’s established and robust chemical residue risk management procedures and brought to the attention of the ADF, Dairy Australia and food safety regulatory authorities.

We support the ongoing registration of this vital product.

Economics & Trade, Policy & Advocacy

Time to come clean on code claims

By Ben Bennett, ADF President

They say transparency builds trust.

It’s curious then that some processors and their representatives in the dairy industry have been calling to expedite a scheduled review of the ACCC Dairy Code of Conduct without clearly articulating their reasons.

All the more curious given the timing, when we have competitive milk prices (which are set by the processors themselves and the marketplace).

It’s even more curious given some of the recent misinformation in the media, suggesting the code is responsible for high retail dairy prices, and that this is in effect driving a high cost of living, as well as exacerbating the differential between high domestic prices and cheap imports from overseas.

All this suggests that processors are feeling price risk pressure and that it is the code itself that is protecting farmers from this risk being passed down the supply chain in the form of price step-downs this season.

Could it be that processors would like to see the floor price removed from the code? Could it be that they are opportunistically using media around the cost-of-living crisis and the government’s subsequent supermarket inquiries to lobby for an earlier review of the code?

Let’s be clear, it is the processors themselves who have bid-up the price of milk to secure supply in the current market. This is the marketplace at work.

The code does not set the price. It provides the rigour around commercial contracts in the form of milk supply agreements.

Processors are required to honour the minimum price they themselves set after they have locked in a contract with the farmer. The processor can increase prices, and in certain exceptional circumstances, if justified, they can also decrease prices.

As the Australian Competition and Consumer Commission (ACCC) has stated, the code is the thing that “imposes minimum standards of conduct on processors and dairy farmers”.

These standards are needed. We know that’s the case, having lived through previous claw-backs and the subsequent impact on the industry. These led to farms leaving the industry and the declining milk pool, which is now ironically coming home to roost as processors compete for that reduced milk supply.

The Australian Dairy Products Federation (ADPF) commenced the campaign with its executive officer in The Weekly Times advocating that “a further three-year delay (on reviewing the code) is simply unacceptable”.

Yet more articles in mainstream urban press have attempted to tarnish the code as a mechanism that inflates prices. We’re now hearing some processors openly push to have the review of the code brought forward.

In an interview on ABC radio, the CEO of one processor was asked for their take on reviewing the code.

They implied the code wasn’t working for all parties, however couldn’t, or wouldn’t, stipulate what exactly he thought was broken.

The processing company in question received a significant fine last year for breaching the code. After the Federal Court finding, the ACCC Chair commented: “We took action because we considered (the processor’s) conduct would reduce transparency in the industry and served to perpetuate systemic bargaining power imbalances between processors and farmers.”

However, neither the processor in question nor the ADPF have articulated why they believe the codes should be reviewed, or why it isn’t working.

Presumably, processors weren’t feeling the price squeeze during the first review to the same degree as they are now.

Regardless, Australian Dairy Farmers (ADF) would like to see processors treat the rest of the industry with respect and engage in good faith when calling for the review of the code to be brought forward.

It’s time to come clean and be transparent!

After all, if it’s so urgent, we deserve to know the underlying reasons.

Is it simply because they want the floor price for milk withdrawn, making it easier for them to drop prices mid-season? Anyone who was dairying in 2016 will remember where that can end up.

Been here before

The code only came into effect just four years ago and has already been reviewed once in late 2021. This review, a separate Senate inquiry into the dairy industry and the ACCC Perishable Goods Inquiry found no evidence of reduction in competition arising from the dairy code.

In fact, they validated its appropriateness with only minor changes recommended. The second dairy code review has been deferred to allow changes from the 2021 review to take effect.

All parties were consulted and had opportunity to provide input during the last review. Plus, the Department of Agriculture, Fisheries and Forestry is already calling for input on the coming review.

Let’s remember that the code does not set prices. It provides rigour and protection for farmers.

Having considered all this, ADF believes the coming review should be completed. Not least to fulfill legislated obligations. However, there’s no need to bring it forward.

The code is protecting dairy farmers, bringing transparency to the market and addressing power imbalances.

Economics & Trade, Policy & Advocacy

In defence of the Code

It’s something we see so often in life – people seizing an issue and misrepresenting the facts to push their agenda.

That’s exactly what has happened recently in the dairy industry. If you haven’t yet heard of the cost-of-living crisis, you’re lucky. It has been all over the news.

Yet, some industry participants have seen this as an opportunity to pursue their agenda to effectively water-down the mandatory Dairy Code of Conduct. They’ve presented an argument that the Code is, in effect, setting prices and contributing to this cost-of-living crisis.

Blaming the Code for food inflation or the price difference between high domestic dairy prices and cheap international dairy products is, at best, misleading.

This deliberately misrepresents and confuses a number of issues, including the purpose of the Code, how milk prices are set, and underlying world supply and demand.

The misrepresentation is particularly concerning, given the timing. The Department of Agriculture, Fisheries and Forestry is currently seeking the industry’s feedback on aspects of the Code.

Firstly – the Code does not set prices. It adds rigour to contracts. It was introduced after the devastating behaviour of processors in 2016, when they clawed back payments to farmers – resulting in many leaving the industry and contributing to reduced supply.

Secondly – domestic prices are, in effect, set by milk processors. The processor places their price in the market. Farmers and processors then lock in commercial contracts accordingly.

Thirdly – the disparity between high domestic prices and low international prices is being driven by underlying market forces. It’s simple supply and demand.

Domestic milk prices were ‘bid up’ as Australian processors vied to fully utilise their excess processing capacity, as they (not the Code) set prices. Whereas, discounted international prices from the likes of New Zealand and the US are largely because these are major net exporters of dairy products. This domestic Australian shortage and the export surplus of our competitors is what causes a world price differential – not the Code.

It was the years of volatility and low prices paid by retailers and processors, as well as the 2016 clawbacks, that contributed to the declining milk supply in Australia and excess processing capacity.
In the ACCC’s words, the Code is intended to “account for the imbalance of bargaining power between dairy farmers and processors, and address longstanding industry practices which were seen to be unfair or had the effect of deterring farmers from responding to market signals”.

One way it brings rigour, discipline, and price transparency to the market is in forcing processors to nominate their minimum price and honour their fixed-price agreements.

Processors determine their (minimum) price which, upon signing a contract, is locked in. They’re able to increase prices, if they choose. In certain circumstances, if justified, they can also reduce prices.

Importantly, like all good market instruments, the Code helps farmers and processors share and manage risk.

It’s clear to us the Code is working. In taking action against a processor last year under the Code, the ACCC stated: “we considered (the processor’s) conduct would reduce transparency in the industry and served to perpetuate systemic bargaining power imbalances between processors and farmers”.

Ironically, if you want further proof the Code is working, you need look no further than this recent Code-price spin from our processors. It has also passed many other tests.

It was reviewed in November 2021 by the Federal Department of Agriculture. In that review, most stakeholders, including the ACCC, were highly supportive of the Code.

Similarly, the Senate inquiry into the dairy industry and the ACCC’s perishable goods inquiry found no evidence of a reduction in competition arising from the Code.

Farmers are business people. They require a strong, competitive and transparent marketplace to drive greater milk production and ensure milk processing capacity is fully utilised.

Targeting the Code as the cause of food inflation or international-domestic price spreads is clearly a misleading tactic to push an agenda to water it down.

If processors want to have an open conversation about price transparency and contracting options, they should do so. If they say they support the Code – then do just that. Park the spin.

Increasing domestic production is a real issue faced by the whole industry – something which farmers and processors are working on, and which is critical to the future of our industry.

At a basic level, knowing what they’ll be paid gives farmers the certainty they need to make investment decisions for their business. Without that certainty, you’ll see a whole lot more farmers leave our industry – right when we need them to increase supply.

As such, Australian Dairy Farmers (ADF) strongly supports the underlying principles of the Code.

No doubt we’ll continue to hear complaints about the Code. But let’s not get sidetracked by the agenda and the spin.

This indicated desire to wind back the Code cannot be allowed to snowball into a return to the years of volatility and low prices paid by retailers and processors. Such a situation would only serve to perpetuate the dilemma of declining milk supply in Australia and excess processing capacity.

Sustainability

Dairy profitability and sustainability linked

BY ANDREW ALDRIDGE, AUSTRALIAN DAIRY FARMERS FARM OPERATIONS POLICY ADVISORY GROUP CHAIR

Aussie dairy farmers are doing a bloody good job when it comes to environmental sustainability. But like marathon runners competing against folks doing their first couch-to-5k, those personal best records aren’t going to fall as easily and in as big an increment as those just getting started.

We need to recognise that back in 2012 we were the first Australian ag industry to have the foresight to set up a sustainability framework that covers our livelihoods, human nutrition, our animals and the environment. That since then we’ve made big gains, and that while we’ll continue to make gains, they’ll be increasingly incremental.

Sure, the latest Australian Dairy Sustainability Framework report figures are looking pretty good, but the reality is what we’re going to see from now on are incremental gains. It’s not because we’re not doing enough, but rather because we’ve done so much already.

Today more than 70 per cent of Australian dairy farmers have implemented energy efficiency projects or used renewable energy and 83pc have fenced off all natural waterways.

We’re also making new commitments, such as agriculture’s first industry action plan for halving food waste and a roadmap to improve the sustainability of the packaging of dairy products by 2025.

Of course, we need to keep going: farmers have traditionally been custodians of their land and environment, as demonstrated by organisations such as Landcare, which started more than 30 years ago! We now see it has become a focal point for global and domestic consumers and markets.

But we need everyone to recognise that the next gains are going to be tough, and we need to balance our business viability alongside our environmental investment.

Trust is strong in dairy industry

It’s encouraging to see consumer support for dairy reflected in the framework report. The Dairy Trust Tracker Survey shows that is strong, with almost eight in 10 Australians of the belief dairy is essential for good health and wellbeing.

In 2023 the dairy industry also welcomed the release of a study that quantified the health and financial benefits that could flow from increasing the servings of dairy in the diets of aged-care residents. Essentially, consumers know dairy is good for them. And they should feel good about consuming dairy, too.

As we look to 2024, we need to make sure we continue to do our bit for the environment, but we also need to make sure that consumers understand our bottom lines must also be sustainable.

“It’s incredibly hard to be green if you’re in the red”, as they say.

To keep producing food that is nutritious, good for our health and wellbeing and sustainable, it must also be commercially viable – we must be able to turn a profit like any business, otherwise we are not going to be here long.

Essentially, we need regulators and shoppers to recognise the good work we’ve done and when comparing our produce with countries that don’t have the standards we do be willing to pay for the sustainability progress we have achieved.

That’s not all we need to do. We need the whole supply chain to do its bit and not just to look at farmers for the easy gains.

We need to be real about the promise of the new income streams for adapting and mitigating climate change.

Sure, these may be great for some, but for a lot of us already doing good environmental work, we’ve done it. It’s not new, so we won’t be rewarded or will need to keep the gains to shore up our post-gate credentials.

We need to ensure farmers’ interests are represented when new well-considered environmental policies and regulations that impact us are being set. These must recognise that due to the industry’s front foot approach that a scalpel is needed not a chainsaw.

Perhaps most importantly, we need to keep our eye on those personal best scores, not just for the environment but for long-term profitability as well. Whatever the world (or nature, for that matter) throws at us, we need to keep doing what we do best, continually evolving and improving what we do and ensuring we have a dairy industry that not only cares for the environment but which makes sense financially too.

To download the 2023 Sustainability Report, visit https://australiandairyfarmers.com.au/adsf/.

Policy & Advocacy, Sustainability

Ag needs a seat at the Murray Darling Basin table

BY ANN GARDINER, ADF Water Committee Chair

People who should be making decisions on an issue should be the closest to it, and I can tell you right now Canberra is a long way from the Murray Darling Basin (MDB).

Last week the Restoring our Rivers Bill got the support it needed to pass the Senate, and what worries me most is that it’s people far away from the MDB that have had the most say in its future.

Trust me, the Minister said when we met with her two weeks ago in Sydney. But to be honest with you, trust doesn’t go all that far when it comes to politics.

That’s why we’re calling for an ag industry advisory group to be appointed to play a role in the implementation of this legislation.

When ADF’s president and CEO then met with the Federal Water Minister Tanya Plibersek on the same day the Senate support was secured they made it clear to her that this was what was needed.

In representing dairy farmers at these meetings, we have collectively expressed our significant concerns to the Minister about the Bill and the risks it poses to our industry, our farmers, and our regional communities. We explained to her that this is all coming when milk production is at an industry 30-year low.

We also sought details on the new amendments to the Bill. The Bill passed the Senate with minor amendments that included a consideration of socio-economic impacts and options to lease water to the environmental water holder as an alternative to buybacks.

The industry advisory group could help ensure that the government genuinely engages with industry in the implementation and rollout of the new legislation.

The group would endeavour to minimise the negative impacts of buybacks by ensuring ongoing government accountability including the consideration and reporting of socio-economic impacts. It would aim to ensure that “all options are on the table” just as the Minister has said, not just buybacks, and would provide valuable input into these options.

Further, the group could provide input into the inevitable community assistance packages that will be required from structural change because of buybacks.

Our continued aim is to ensure that dairy farmers have a seat at the table. Much as we may not like buybacks, and the potential damage they will do to industry, better to be there trying to mitigate this damage than just throw our hands in the air and walk away.

Twenty per cent of the nation’s total milk production comes from the Murray Darling Basin region. It is home to 912 farms and 42 dairy processing facilities, creating almost 7000 jobs and generating about $2 billion of value to the region and local communities.

Since the introduction of the MDB Plan in 2012, dairy farm numbers in the region have fallen by 47 per cent and raw milk production has dropped by 35 per cent.

We need a healthy dairy industry in the Murray Darling Basin.

If more farmers leave, those left behind are going to struggle. Fewer farmers mean the burden of maintaining irrigation infrastructure falls on the dwindling numbers left behind. It means fewer kids in schools and less money spent at local stores.

It also means less milk produced, and higher prices at the supermarket for Aussie families. Our dairy exports will take a hit.

But don’t get me wrong. We’re disappointed, yes. We’re worried, absolutely. But we’re also optimistic. We know there are innovative solutions that deliver water for the environment that don’t involve damaging buybacks.

If Minister Plibersek wants us to trust her, then she needs to trust us back, and establish an agricultural industry advisory group that guides implementation in a way that allows us to use our knowledge and understanding of the basin and delivers projects without negative consequences to communities and agricultural production.

Let’s get an advisory group in place, let’s listen to the people whose lives and livelihoods depend on the Murray Darling Basin, and let’s do what we can to get this right.

Economics & Trade

EU deal no winner for agriculture

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

This week, I’m representing the interests of the Australian dairy industry in Osaka, Japan, where free trade talks with the European Union (EU) fell over on Monday.

To be honest, the stalemate comes as a relief for Australian dairy businesses. The deal on the table from the EU was not free and it was certainly not fair for Australian agriculture.

The Federal Minister for Trade and Tourism, Senator Don Farrell, has our complete backing for walking away from a deal that was not in the interests of Australian farmers.

No deal is better than a deal which offers no gains for Australian dairy farmers, just costs and burdens.

It remains to be seen when and how negotiations will re-start in the future. It’s not likely to be anytime soon.

I’ve been clear about what we wanted from these meetings, and that was a fair go for our dairy farmers. Australian dairy is a supporter of a free, and importantly a fair, trade deal.

Getting the best possible access to the EU and Asian markets is critical to the future profitability and competitiveness of farmers and the whole Australian dairy supply chain.

We were particularly concerned that an agreement on geographical indications (GI) as part of an Australian-EU free trade agreement (FTA) could restrict the use of common food names, including names of cheeses we commonly produce here in Australia.

It is estimated the deal sought by the EU could have cost the Australian dairy industry more than $75 million per year. It would have also cost the Australian taxpayer as the onus was on our government to manage the GI regulation.

To rub salt in the wound, the deal would have provided greater access for subsidised EU products to the Australian market, without offering reciprocal access for Australian products to the EU.

This is far from fair, as is demonstrated by the greater than 70,000 tonnes of European dairy product imported to Australia every year, compared to the 500 tonnes Australia exports to the EU in-turn.

At trade meetings in Osaka, I made it clear that the future success of our industry relies on a level playing field. The market access offer from the EU was neither equitable nor fair.

Having these conversations in Japan is significant, as Japan was Australia’s second most valuable dairy market last financial year, with 14 per cent market share.

Although volumes were down, the value of our exports to Japan rose 9.5pc year-on-year in 2022/2023, to reach $423 million.

Asian markets are consistently our top five dairy export markets. What we agreed to in our EU deal, especially around GIs, would have implications for other export markets, including Asia.

We must continue to grow our international markets. In 2022-23 Australia’s share of global trade rose to 4.7pc. The target in the Australian Dairy Sustainability Framework is 10pc by 2030, so we’ve still got some way to go.

Global market access will continue to be a core priority for Australian Dairy Farmers, and if this means walking away from a deal that doesn’t serve our interests, then that’s what should be done.

Policy & Advocacy

New Murray-Darling Basin plan ignores farmers

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

The gloves are off for many farmers right now when it comes to water issues, and it’s worth taking a moment to reflect on why some of our usual diplomacy is being set aside.

To put it simply, we’re feeling ignored and fed up.

You see, we’ve spent the past couple of years meeting with and providing submissions to the federal government about possible solutions to the Murray-Darling Basin Plan’s challenge of finding water for the environment.

The health of the Murray-Darling Basin is critical to those of us in the dairy industry, given one-fifth of the nation’s milk supply is produced in the basin. But it’s also an issue for anyone who farms in the Murray-Darling Basin.

Most of us know that environmental flows are necessary and care about a healthy river system. Our livelihoods and the wellbeing of regional communities depend upon it.

We also know from experience that water buybacks can have a devastating impact on the communities living in the Basin, most of whom have no water to sell, but will still pay the price. They cause an exodus of people, drive up water (and consequently food) prices and impact our ability to grow food to feed families across Australia and the world.

And, finally, what we know and what the Minister for the Environment Tanya Plibsersek knows (and even acknowledged last week) is that there are alternatives to buybacks. There are other smart and innovative ways to deliver the plan’s outcomes.

So, why does the proposed water Bill currently on the table from the Federal Government allow for unlimited water buybacks to return the planned 450 gigalitres of water to the environment?

The Bill extends the timeline for delivery of the MDB Plan to 2027, which we’ve welcomed. But by permitting buybacks as a way to achieve its environmental aims and watering down the socio-economic testing, it becomes the “bad bill” so many of us are angry about right now.

Speaking at Murray Bridge last week Minister Plibersek said while “water purchase is … not the first tool at hand … it has to be part of the mix”.

I disagree. I know it seems simple. Buy water, throw it down the river and the environment will flourish. Don’t let social and economic issues or the physical limitations of our current infrastructure get in your way.

But that’s not how the environment or our society operates.

Additional water, without other changes, does not necessarily mean the environmental outcomes we need will be achieved. Indeed, it’s possible that it will do more damage than good.

A whole raft of complementary measures is required to underpin environmental outcomes. Do you remember the Menindee fish deaths? The New South Wales Government Chief Scientist found that the key contributors were water quality and a lack of mobility for fish (i.e. they needed fish passage/ladder reform).

Push more water down the river and you’ll likely end up with infrastructure damage and possible flooding of local communities.

Driving the price of water up artificially with buybacks makes many farm businesses unviable and drives people off farms. This leads to increasing food prices, both because inputs now cost more and because there’s less availability.

Losing farms from a region has a huge flow-on impact on a region. Most of a dairy farmer’s milk cheque is spent in the region where they farm. Take the farm out of a region and you lose that farmer, the people they employ and the money they bring to the local economy.

The other aspect that this too-simple plan overlooks is that many farmers use their water to provide on-farm environmental outcomes, including wetlands and fenced-off revegetated areas. Take water away or make it prohibitively expensive and much of this work will end.

So, what’s the answer here? Amend the water Bill proposed by the federal government, which in its current form is bad for basin communities, bad for regional jobs and bad for people who eat food (i.e. all of us). Drop the use of buybacks and bring back the socio-economic test. Work with farmers and farming communities on innovative solutions that deliver environmental benefits, while also allowing us to produce quality food in the quantity and at the price Australian consumers require.

It might not be the ‘simple’ solution.

But you know what? It might actually work.

Policy & Advocacy

Dairy voice eyes reset

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

The dairy industry is facing some serious challenges and right now, dairy farmers need someone in their corner.
For more than 80 years, Australian Dairy Farmers (ADF) has been proud to play this role. As the peak body for dairy farmers, we have two core functions: to ‘represent’ dairy farmers in formal roles and to ‘advocate’ on behalf of dairy farmers to industry, government, processors and community.

In terms of advocating, we are currently defending the hard-won Mandatory Dairy Code of Conduct. It was carefully designed to equalise bargaining power arrangements between farmers and processors in the trading of raw milk. It imposes minimum standards of conduct that address unfair and harmful practices by processors against farmers and improves certainty and transparency in commercial arrangements.

The Australian Dairy Products Federation (ADPF), which represents dairy processors, claims the code is contributing to profitability pressures on processors and is not operating as intended.
We are making it clear that while processors are experiencing some financial pressures, the code is not the problem.
Many dairy farmers and their communities have been devastated in recent years, with $1 milk, step-downs, claw-backs and reduced competition in the milk market. The code is a significant step towards protecting farmers’ interests and continued milk supply.

As well as defending the code, ADF is objecting to Coles’s proposal to buy two milk processing sites from Saputo Dairy Australia at Laverton North, Victoria, and Erskine Park, NSW.
ADF has voiced its concerns in media and in submissions to the Australian Competition and Consumer Commission (ACCC). ADF is concerned the proposed acquisition could substantially lessen competition for raw milk with potentially detrimental impacts on dairy farmers and the broader dairy supply chain in the short and long term.

The ACCC echoed our concerns with the release of a Statement of Issues in August requiring further scrutiny of the deal. We now await the ACCC’s final ruling, scheduled for September 14.
These are only two of the many examples whereby ADF provides critical policy advice to the Australian government on the issues that matter most to dairy farmers. Some of these issues are quite public like the Murray Darling Basin plan or trade agreements such as the European Union Free Trade Agreement.

Others are less public but will still impact dairy farmers such as legislation to mandatorily report emissions; the Minister’s workforce taskforce; or upcoming legislation for agricultural and biosecurity levies. ADF continues to work for dairy farmers behind the scenes regardless, no matter how public the issue is. Recently, our role as the peak dairy body representing all dairy farmers to deliver ‘industry good’ services on behalf of the industry has been in focus.

ADF provides oversight, governance and strategy functions to Dairy Australia and serves as the representative peak dairy body on biosecurity with Animal Health Australia.
ADF is also the dairy member of Safemeat, a partnership between the Australian government and the meat and livestock industry, which promotes Australia’s best practice management systems.
As the dairy representative, we’re working with the Department of Agriculture, Fisheries and Forestry, as well as the chief veterinary officer, on the threat of lumpy skin disease.

Under our current model, ADF funds these industry good functions via member fees and other revenue streams. This arrangement is unsustainable. Not-for-profit member organisations are coming under increasing funding pressure, at the same time as industry must step up its preparedness against the increasing risk of a biosecurity outbreak. It is unfair that a minority of dairy farmers pay for these industry-good functions that ADF delivers for the benefit of all levy payers.

The Australian Dairy Plan 2020-2025 identified structural reform, including providing a sustainable funding model, as the most important priority for industry bodies. ADF is the peak dairy Industry Representative Body (IRB) for all dairy farmers. An allocation of a small percentage of the compulsory levies collected from dairy farmers for research, development and extension and biosecurity to ADF would help deliver that priority and sustain these essential services.

As the national industry representative body, ADF must be positioned to best meet the needs of our members and the interests of all dairy farmers and industry in the long term.
These issues are top of mind as we embark on a strategic review of the role, structure and funding of ADF. In coming months, we will reach out to members and other industry stakeholders to hear their views about what they want from ADF and how they want it structured.

I look forward to leading this review and ensuring ADF can continue its important work for years to come.

Policy & Advocacy

ADF says ACCC decision validates its concerns on Coles-Saputo deal

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

Dairy farmers are reassured by the Australian Competition and Consumer Commission’s (ACCC) decision to further examine Coles’s proposal to buy two milk processing sites from Saputo.

Australian Dairy Farmers (ADF) believes the ACCC’s decision validates its concerns about the proposed sale of Saputo sites at Laverton North, Victoria, and Erskine Park, NSW, to Coles. The sites produce fresh milk for Saputo’s Devondale brand, and for other parties, including Coles’s home-brand dairy products.

ADF is concerned the proposed acquisition could substantially lessen competition for raw milk and have further implications for the sale of dairy products at a retail level.

In June, we raised these concerns in a submission to the ACCC that opposed the deal. In reply, the ACCC has identified issues associated with the acquisition that it is investigating further.

In releasing the Statement of Issues, ACCC deputy chair Mick Keogh echoed our concerns and those of many of our members. “For NSW dairy farmers, concerns have been raised that this acquisition may change Saputo’s incentives to continue acquiring raw milk in NSW,” Mr Keogh said.

“If Saputo does exit NSW as a result of the acquisition, this would leave limited competition in regions of NSW, which could result in farmers receiving lower prices for their raw milk.

“We have heard strong concerns across the industry about how the acquisition will strengthen Coles’s position in the dairy supply chain.

“Many industry participants have expressed concerns that the acquisition will result in Coles consolidating its private label milk production, which would increase its bargaining power in negotiations with dairy processors and dairy wholesalers.

“The ACCC is concerned that Coles’s increased bargaining power could lead to reduced competition at the wholesale level, impacting on processors’ long-term viability and with the potential for flow on impacts to farmers in Queensland and regions of NSW.”

Like ADF, the ACCC has raised concerns the sale of the Erskine Park facility may see Saputo exit market/s for raw milk in NSW and give Coles the ability to foreclose or frustrate competitors.

As part of an ACCC consultation process, interested parties have until August 3 to respond to the Statement of Issues. ADF has, of course, submitted a response.

From the outset, ADF has argued competition would decline over the long-term, if Coles began to preference its own brands over competitors in the procurement of farm suppliers and sales in its retail outlets.

ADF does not wish to see a sale that disadvantages dairy farmers in the long-term.

The Competition and Consumer Act 2010 requires the ACCC to approve the acquisition. The legal test the ACCC applies in considering the acquisition is in Section 50. This requires proposed acquisitions to not have the effect of substantially lessening competition in a market.

In theory, Coles already can (in effect) set the retail price of competitor brands in its stores. This deal would give Coles total control of every fresh milk price within its sphere of influence.

An incentive already exists for Coles to act in this way, however, the proposed acquisition, bringing with it increased vertical integration, maximises the potential financial gains for the retailer.

If the sale proceeds, we want Coles to guarantee that all existing Saputo farmers supplying milk to the processing plants will be offered milk supply agreements with either Coles or another party over the long-term. We do not want to see contracts restricted to Coles’s suppliers only.
Dairy farmers need strong competition for their milk. They do not want a deal that could reduce competition for their milk and reduce the supply or choice of products for consumers.

ADF is seeking an outcome from the ACCC that does not reduce competition in the value chain and benefits – or at least does not disadvantage – dairy farmers and the market, more generally.

ADF not want to stand in the way of Saputo, one of the country’s largest dairy processors. We hope, irrespective of the outcome of the investigation, that Saputo and Coles will act in the best interests of the dairy farmers of Australia.

Economics & Trade

A new era of potential for Aussie dairy exports

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

You might have heard about the slow-down in China’s economy. Things have not taken off post-COVID, as expected.

While it is true the heifer trade has all but evaporated, do not think for a minute that the opportunities for Australian dairy with our biggest trading partner are also on the slide.

In June, I was fortunate to join the first Australian dairy trade visit to China since COVID. I spent six days there with Charles McElhone, Catherine Taylor and Sarah Xu from Dairy Australia.

As part of the trip, I attended the China Dairy Industry Association conference in Nanchang and met with Dairy Australia Scholarship alumni. I attended industry meetings at the offices of Coles, Austrade and the Victorian Government in Shanghai and met with Chinese dairy manufacturers.

It all left me with the resounding feeling that there are many significant opportunities in China for Australian dairy businesses, albeit in a slightly different guise than what we are used to.

China is Australia’s biggest dairy export market, taking more than 30 per cent of the dairy product that leaves our shores.

Traditionally, we have sent milk, infant formula and yoghurt. But Chinese consumers are developing a taste for cheese and frozen creams … the fats, essentially. From what I observed, their tastes are predominantly sweeter. We saw processed cheese that looked like lollipops – flavoured and on a stick – for kids!

In some good news, local nutritional guidelines are promoting dairy consumption.

The dairy packaging we saw in China also lends itself to on-the-go consumption. Milk was commonly sold in 100-250ml bottles and cheese was individually wrapped in single serves.

In China, there are many modern styles of cuisine, as well as the more traditional dishes, so there is plenty of scope for the use of Australian dairy products in Chinese meals and diets.

For now, China will be importing a lot of cheese, as opposed to producing it locally. It will be mainly the cheddar style, as consumers have not quite developed a taste for soft cheeses yet.

Free trade deal a saviour for dairy exports

The China-Australia Free Trade Agreement (CHAFTA) is invaluable to Australia. When it comes to dairy, Australia enjoys marketing advantages over other countries, with minimal tariffs. Australia’s liquid milk exports attract a 1.5pc tariff, compared to 15pc from the US and European Union.

Milk powders are taxed at 2.5pc compared to 10pc and cheese 1.2pc instead of 12pc. Infant milk formula wins the race, with zero tariff compared to 15pc from the US and EU. That said, we saw a lot of product from the European Union and the United States on supermarket shelves, as well.

Pleasingly, Bega cheese was available in many places and our A2 milk was quite popular as well.

There is also a significant appetite for bulk ingredients like frozen cream and whey powders, as opposed to retail products. The bulk trade outweighs Australian retail offerings in China.

Wherever we went, I noted that all these Australian products were still well respected and trusted. The Chinese are still looking for Australian dairy.

However, like us here at home, they are concerned by the dwindling Australian milk pool.

Dairy scholarship program pays dividends

Meeting with alumni of the Dairy Australia Scholarship was a highlight of the visit.

The scholarship program has been running for more than 20 years, bringing people from China, Japan, southeast Asia and South Korea to Australia to see our industry.

The great thing about the program is that many of the participants climb the corporate ladder. Some go on to become managing directors and CEOs of Chinese dairy companies.

It means Australia enjoys strong relationships with these companies. The scholarships and ensuing relationships mean we have contacts who are open and honest with Australia about what is happening in their industry.

Whether it is the scholarship, trade meetings, export potential or cheese lollipops, it really was inspiring to see the value and opportunity that exists for the Australian dairy industry in China.

Policy & Advocacy

Coles’ dairy deal sparks concern

By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

Today, 1 June, is World Milk Day – a day when we celebrate a nutritious food that makes for a healthier world.

For Australian dairy farmers, today is also D-day. It’s the day when dairy farmers find out what price processors will offer for their milk at the farmgate for the coming supply season.

The Mandatory Dairy Code of Conduct requires processors to publish these prices and, in doing so, the code has brought more transparency to milk pricing and certainty for farmers.

Yet, amid this celebration and certainty there is caution because Australia’s competition watchdog is considering Coles’ proposed acquisition of two milk processing facilities from Saputo.

This is a deal Australian Dairy Farmers (ADF) has voiced its concerns about – both publicly and in a submission to the Australian Competition and Consumer Commission (ACCC).

Specifically, we are concerned about issues around price transparency, competition, market power and control.

Already, Coles has the theoretical ability to set the retail price of its competitor brands in all its supermarkets. This deal would make Coles a processor, affording total control of every fresh milk price within the Coles sphere of influence.

The supermarket giant wants to purchase Saputo’s Laverton, Victoria, and Erskine Park, NSW, facilities. The bulk of the processing done at these two facilities is to supply Coles’ home brand milk products.

ADF does not want to see a deal that disadvantages farmers. Dairy farmers need strong competition for their milk.

ADF is concerned that the proposed acquisition would provide Coles with a stronger incentive to restrict or discriminate against the branded milk it offers, to the advantage of its private label milk.

An incentive already exists for Coles to act in this way, however the proposed acquisition, bringing with it increased vertical integration, maximises the potential financial gains for the retailer.

If the sale proceeds, we want Coles to guarantee that all existing Saputo farmers supplying milk to the processing plants will be offered milk supply agreements with either Coles or another party over the long-term. We do not want to see contracts restricted to Coles’ suppliers only

A chequered past of milk discounting

ADF is conscious of Coles’ prior conduct, in particular the introduction of the $1 per litre milk pricing model which hamstrung dairy farmers for eight years.

We note there was further criticism of Coles’ behaviour when it finally increased prices and promised to pass on the 10 cent per litre “drought levy” to farmers. Coles committed to pay around $5.25 million to processor Norco to resolve the concerns after the ACCC became involved.

However, it must be noted that poor behaviour is not exclusive to any one party in the supply chain.

The supermarket duopoly already has enough market power to lower prices for milk products across the board and dedicate extra shelf space for private label products.

A vote of confidence in dairy’s future

For now, we must remain upbeat as we await July 20 – the provisional date the ACCC has set to announce its findings.

To remain positive, in the spirit of World Milk Day, the deal can also be viewed as a vote of confidence in the future of dairy.

ADF has confidence in the ACCC’s review process and does not want to stand in the way of Saputo, one of the country’s largest dairy processors. We hope, irrespective of the outcome of the review, that both Saputo and Coles will continue to act in the best interests of those ADF works for – the dairy farmers of Australia.

We hold this hope in good faith, bearing in mind that retailers, processors and farmers all need each other.

On World Milk Day, we encourage all industry stakeholders not to overlook the value of the nutritious food produced by dairy farmers in Australia.

This year, the Australian dairy industry has a local theme for World Milk Day – “make your mornings with milk”. The campaign encourages everyone in the dairy supply chain to take to social media with a photo or video showing how you “make your mornings with milk”. Don’t forget to tag #WorldMilkDay and #EnjoyDairy … just as we do at ADF!

Economics & Trade

Australian Dairy Farmers warns about impact of inflation, interest rates

By CRAIG HOUGH, DIRECTOR STRATEGY & POLICY, AUSTRALIAN DAIRY FARMERS

With Australia’s annual inflation rate at a 30-year high, there is no denying consumers are feeling the economic squeeze.

But inflation and interest rates – the same factors that drive up the cost of living for consumers – are also hurting Australian dairy farmers.

When an Australian dairy farmer looks at their bank statement, on average, they will see seven red figures. That is because the average Australian dairy farm debt is now $1.2 million – a record high.

The International Monetary Fund (IMF) has predicted that global inflation will fall to 6.6 percent in 2023 and 4.3pc in 2024, which is still above pre-pandemic levels.

This means the Reserve Bank of Australia will continue to increase interest rates. After a decade of no interest rate increases, the RBA has made nine interest rate increases since May 4, 2022. This has amounted to a total increase of 3pc to increase the cash rate target, which is the market interest rate on overnight funds, from a record low of 0.10pc to 3.35pc currently.

It is the rapid rise that is hurting farmers and households. Most never budgeted for such dramatic change.

How much they increase further will depend on what other measures governments take to address the drivers of high inflation – production and supply chain inefficiencies and disruptions and excess money supply.

Why the inflation?

Dairy farmers are lucky there’s strong competition from processors. The relatively strong prices go some way to offset high input costs and the rising cost of servicing a debt.

The war in Ukraine is often cited as the reason costs are rising. But the reality is much broader than that.

Wages have risen, leading to increased consumer spending and an ability for businesses to charge more for a product.

Labour and material supply shortages, mainly from COVID-19 lockdowns, has limited production capacity and not been able to keep up with demand.

Consumers understand that the RBA increases interest rates to keep inflation in its target range of 2-3pc.

However, they do not understand that these decisions have significant ramifications for the people who produce the food they eat.

We also do not talk enough about how government spending can influence inflation.

State and federal governments have not invested in productivity-enhancing initiatives and have spent too much borrowed money, which in turn adds to inflation.

Australian Dairy Farmers’ (ADF) analysis of last year’s federal Budget found a need for structural reform to offset the rising costs of administering social programs like the National Disability Insurance Scheme, and further reform to mitigate the risk of a potential global recession and provide better value of the Australian taxpayer dollar.

Importantly for dairy, ADF also would have liked to see food included in a $7.5 billion plan to mitigate inflation for parents and socially disadvantaged people in last year’s budget.

Future fiscal policy

The Business Council of Australia and the National Farmers Federation submissions to the May 2023 Budget provide direction and initiatives on how cost of living, productivity and fiscal responsibility can be improved.

The key priorities are economic and Budget reform, sustainably resourcing our biosecurity system, sustaining our natural environment, responding to our urgent road and infrastructure needs, securing Australia’s farm workforce and supporting smarter growth for regional and rural Australia.

To maximise the impact of these initiatives, ADF believes the government needs to bring the Budget back in surplus.

Reducing the deficit will cool demand and inflation, so central banks do not need to raise interest rates as much.

This helps everyone repay their debts while maintaining an appropriate standard of living.

People & Community

Celebration of Dairy event held at Parliament House

By RICK GLADIGAU, AUSTRALIAN DAIRY FARMERS PRESIDENT
Australians often take the dairy industry for granted as they tuck into their breakfast, lunch, dinner, desserts, or a nice cheese platter.
Having returned recently from trade missions to Asia and Europe, I can say with confidence that Australia is blessed with its huge array and ample supply of fresh, nutritious dairy food.

Unlike some markets overseas, our dairy products, right down to the basics like fresh milk, are readily available wherever we are in Australia.
This is not always the case overseas.

UK deal welcome

Australian dairy has a reputation globally for being a reliable export trade partner, providing quality nutritious food for a healthier world
About one-third of Australian dairy production is exported.
Australian Dairy Farmers (ADF) supports global free trade.
This is why we welcome the ratification of the Australia-United Kingdom Free Trade Agreement (UK FTA) by the UK Parliament.

The free trade deal is the first with the UK since Brexit. This highlights the speed with which the Australian government and negotiators in the Department of Agriculture moved to secure the deal.
The deal eliminates tariffs on dairy trade between Australia and the UK within five years.
It provides immediate duty-free access for significant volumes of milk, cream, yoghurt, whey, butter and cheese.
Further, the deal increases access to Australian ice cream and infant formula in the UK.

Time to work together

Trade is especially important to the Australian dairy industry.
Having worked with Dairy Australia on trade issues and participating in trade missions, I have learned that it is this Australian demand that the European Union (EU) wants to target in the EU Free Trade Agreement (EU FTA) negotiations.
ADF supports free and fair trade and market access, however, we do not support so-called geographical indications (GIs) being used to effectively trademark commonly used names for cheeses.
Accepting GIs would have a huge economic impact on our dairy processors and farmers – estimated at a staggering $77 million to $95 million a year in the early stages of the FTA.Up to 1000 jobs are at risk.

As a wine maker in France said during my recent visit there with other farmer leaders as part of a National Farmers Federation mission, “we work cleverer together than we do apart”.
The Australian dairy industry took that spirit of unity to Canberra last week when 80 pollies attended a “Celebration of Dairy”, hosted by the Parliamentary Friends of Primary Producers group.
The event’s guests also heard that while the Australian dairy industry enjoys strong demand and faces competition from overseas, it is facing the dilemma of declining milk production.
Dairy farmers have weathered droughts, fires, floods, a pandemic, and rising input costs – however, despite strong milk prices and profitable farmers, we see production has declined.
Our challenge is to sustain strong dairy prices into the long term, address impediments such as workforce shortages, and provide the incentive and confidence for farmers to invest to produce more milk.
It is clear the domestic market; export markets; and processors all want more supply of our great, fresh and nutritious product!

Leading the way

Dairy farmers and manufacturers have long recognised that to continue to produce their delicious and highly nutritious food, they need to operate sustainably.
Australia’s dairy industry has led the way when it comes to sustainability.
It is 10 years since the industry embarked on implementing the Australian Dairy Sustainability Framework – the first of its kind in the world.
It is important to remember when discussing carbon and emissions that everything has an environmental footprint.
As a collective, dairy farmers have voluntarily reduced their methane emissions by 40 per cent between 1980 and 2016.

But we need support and investment to continue to meet our greenhouse gas target of net zero by 2050.

Worth celebrating

Australia’s dairy Industry is the nation’s third largest rural industry, generating $4.9 billion in value at the farm gate.

It produces eight billion litres of milk from 1.3 million cows, averaging 6200 litres of milk per cow per year.
They live on 4400 farms with a workforce of 34,700 people.Despite the challenges in food production, dairy farmers and processors have become more efficient.
As a result, the dairy foods they produce represent better value now than ever for consumers.No wonder Australians consume 93 litres of milk and 15 kilograms of cheese per year!It is a challenging, yet exciting time to celebrate dairy – an innovative and progressive industry and a source of nutritious food for a healthier world.

We have come a long way in the past decade.
Economics & Trade

Australian feta cheese under attack in EU free trade deal

By RICK GLADIGAU, AUSTRALIAN DAIRY FARMERS PRESIDENT

The Australian dairy industry is united in its fight against the European Union’s (EU) geographic indicators (GIs) claim, which represents a potential $75-95 million loss.
The Department of Foreign Affairs and Trade (DFAT) describes geographic indicators as “a name used on a product that has a specific geographical origin and possesses qualities or a reputation that are essentially attributable to that origin”.
You might have heard about GIs in the news recently. That’s because talks on the Australia-EU free trade agreement kicked off again recently, and the EU wants GIs included.
The EU wants to restrict the use of more than 160 agricultural and food names in Australia. The list includes cheeses, meat and smallgoods, horticultural produce, alcoholic drinks and more. Fifty cheese names are included.
The acceptance of GIs in Australia would have deep consequences for our dairy industry.
Australian favourites such as feta, parmesan and haloumi are among those potentially in danger.
Australian Dairy Farmers considers these are common names, adopted right around the world. These cheeses have been produced in Australia for generations, in some cases by immigrants who brought the heritage, traditions and cheese making skills here.
GIs are not accepted globally and are applied inconsistently in Europe. For example, the EU is trying to claim feta for Greece. However, the EU is also home to Danish feta.
Forcing cheesemakers to change the name of their product and denying them the right to use their branding due to evoking European heritage is unjustified. The effects of this will be greatly felt when it comes to farmgate prices, demand for raw milk, and the unfair displacement of local Australian producers and quality made products, putting up to 1000 jobs at risk.
This will inhibit Australian production so the EU can increase exports at our expense.
In addition, the potential direct impact on Australian dairy manufacturers from lost sales and increased marketing costs caused by the strict enforcement of GIs could range from a staggering $75 million to $95 million a year in the early stages of the FTA.

Not a fair claim

ADF supports free and fair trade. That’s why we don’t accept the EU’s claim, and we wouldn’t want to see a similar Australian claim forced upon our trading partners.
To flip the GIs argument – we often forget the macadamia tree is native to Australia.
Macadamia nuts are now grown in Australia, Hawaii, California, Central and South America and Africa.
Europeans clearly have an appetite for them. The Centre for the Promotion of Imports from Developing Countries – a Netherlands government department – suggests Europe is the second-largest importing region of macadamia nut kernels, buying 30 per cent of total world exports.
They’re happily marketed as macadamias worldwide.
Similarly, the lamington originated in Queensland. But I can’t imagine there’s many people wanting to force European bakers to market “sponge squares covered in chocolate sauce and coconut”.
Nobody likes the sound of yeast spread, and let’s not explore a Chiko Roll.

A poor case

To add salt to the wound, the Europeans say products with GI protection can attract twice the value in sales. But research from Hazel Moir, Honorary Associate Professor, Centre for European Studies (CES), at the Australian National University, shows that the GI policy is politically motivated.
She found relevant economic data to support GI policy was most lacking in the EU, “where the European Commission does not yet collect good data to evaluate and improve GI policy”.
Ms Moir reported Europe’s most recent study, from 2013, “simply involves 13 case studies with almost no quantitative data”.
A key point missing from the discussion to date has been the significant changes the Australian government would have to take, should it agree to protect EU GIs.
Implementing such an agreement would require legislative change which would come at a considerable cost to the Australian taxpayer.

Consumer confusion

It’s important to recognise that this debate extends beyond the name of a product. It also includes how it is presented to the consumer.
That represents two layers of confusion for consumers.
Feta and parmesan are the cheeses at highest risk. There are more than 70 Australian brands of feta and 30 brands of parmesan in the market.
Under the GIs regimen, these products would become white, crumbly cheese stored in brine, or semi-hard, grainy cheese.
If introduced, Australian producers could also have to alter the packaging, labels and colours if they are deemed to contribute to a perception the product is of European origin.

Open trade support

Just as Australians value a fair go and share our produce with the world, we value a fair trading environment.
ADF supports free and fair trade, and we look forward to continuing to work with government on this FTA, to achieve a win-win outcome in the best interests of the Australian dairy sector.
The GIs claim represents millions of dollars the industry can’t afford to lose.
Economics & Trade

EU plans to stop Australia using popular cheese names

By RICK GLADIGAU, AUSTRALIAN DAIRY FARMERS PRESIDENT

Australians are being urged to stand behind cheesemakers whose livelihoods are under attack from the European Union as part of the Free Trade Agreement negotiations.
The EU wants to impose Geographic Indications (GI) on cheese.
Under a GI system, Australian cheesemakers could not use cheese names such feta, parmesan, haloumi, pecorino, neufchatel and gruyere.
But imported European cheeses could still use the names.
Cheesemaker Mauro Montalto, from Floridia Cheese, said the introduction of GIs on European cheese would result in more overseas products at Australian supermarkets, taking up prime space Australian producers currently held.
“Our family has been making cheese in Australia for more than 65 years, and the EU’s attempts to restrict common food names is in one word – unjustified,” he said.
“This new system privileges one set of producers, namely those in the European Union, over local Australian producers.”
If the EU is successful, this could have an enormous negative impact on many Australian dairy manufacturers who produce high quality locally made dairy products.
Australian Dairy Farmers president and Australian Dairy Industry Council chair Rick Gladigau said Australia had a rich tradition of cheese making.
It was a core part of the country’s food culture built upon it proud multicultural heritage.
“The impact of a strict agreement on GIs cannot be underestimated,” said Mr Gladigau.
The EU wants to go a step further and restrict the right of cheesemakers to highlight their cultural heritage by banning the use of certain colours, fonts and other branding which it believes could ‘evoke’ European heritage – potentially extending to Greek-style yoghurt as well.
“Forcing cheesemakers to change the name of their product and denying them the right to use their branding due to evoking European heritage is unacceptable,” Mr Gladigau said.
“The effects of this will be greatly felt when it comes to farmgate prices, demand for raw milk, and the unfair displacement of local Australian producers and quality made products, putting up to 1000 jobs at risk.”
The EU’s trade restrictive GIs regime would impact many local cheese brands and artisans and cost them an estimated $77 million-$95 million per annum in the early years of implementation.
“Many of the GI at risk cheeses have been made in Australia for generations. We must protect not only our beloved cheeses but support the cheesemakers who have been making quality products for generations – small and large,” Mr Gladigau said.
“Australia is a multicultural country, and our food culture is a pivotal part of our identity that reflects our proud migrant history.
“Many European immigrants have built successful cheese businesses that supply Aussies with great tasting, nutritious, cheese.”
Mr Montalto said if the EU were successful, many family-run specialty cheese manufacturers, such as his own, would be forced to rebrand their products.
“We’ve seen the EU GI system challenged within the EU itself, and we know it has been inconsistently applied with trading partners such as Canada, NZ, and Japan, in the past,” he said.
Biosecurity, Farming operations

Farmer action key to being prepared for biosecurity threats

By RICK GLADIGAU, AUSTRALIAN DAIRY FARMERS PRESIDENT

You’d have done well to escape commentary last year about Foot and Mouth Disease (FMD) and Lumpy Skin Disease (LSD) being closer than ever to Australian shores.

It has been 150 years since FMD was last in Australia. Currently, the threat of incursion has never been more real.
An expert panel’s assessment showed the probability of an incursion within the next five years had increased significantly. For LSD it more than doubled and the risk of an FMD incursion is up more than 30 per cent.
As the headlines of 2022 fade into the rear-view mirror and we power into 2023, Australian farmers would do well to remain aware of the threat. Behind the scenes, Australian Dairy Farmers (ADF) has worked with countless other organisations to ensure the dairy industry is as best prepared as possible.

Dairy week serves up biosecurity for breakfast

Industry and government have worked together to update many aspects of preparedness and response plans in the past 12 months.
ADF provided an update on these preparations and an overview of the threat and outlook at an industry breakfast we hosted at International Dairy Week at Tatura, Victoria, last month.
The government has done a substantial amount of work to reduce risk and keep FMD out. It has responded to industry concerns by vaccinating cattle and improving biosecurity practice in Indonesia, increasing border controls and detector dogs and implementing other initiatives such as product import risk reviews including dairy products. This has lowered the risk and kept the virus out of Australia.
Looking ahead, ADF has made its position on emergency animal disease (EAD) preparedness clear. Together, dairy leaders are loudly advocating to the government for better preparedness on biosecurity.
In our submission to the Senate’s Inquiry into the Adequacy of Australia’s biosecurity measures and response preparedness, we highlighted ways to further improve Australia’s already commendable preparedness work.
We highlighted the need for ongoing biosecurity funding at or above 2016-17 levels in real terms and greater transparency around where that funding is spent.
ADF also advocated for the reinstatement of the 80pc target for security screening of incoming travellers at the borders.
The full submission is available on the Australian Parliament’s website.

ADF has Senator’s ear, recognition for dairy

The submission has been extensively considered by Senator Linda White, a member of the Senate Standing Committees on Rural and Regional Affairs and Transport, who we were pleased to hear from at the IDW breakfast.
We welcomed Senator White’s acknowledgement of dairy’s united voice on biosecurity. Senator White said agricultural commodities with a united voice had a better chance of clearly advocating for their needs.
Importantly, most of the observations and proposals we made in our submission to the inquiry have been addressed in comment and/or recommendation by the committee in its report.

The stakes are high; be ready, alert

In his address Exotic Animal Disease Preparedness Taskforce leader Dr Brant Smith said Australia enjoyed a good reputation globally for managing disease threats but he said vigilance was important.
We were reminded of the control measures that would be implemented in Australia should there be an EAD incursion.
Consideration of the consequences of these measures reinforces the need for adequate preparation.
For example, the first stage of the response for a FMD incursion involves a national livestock standstill.
Milk collection, transporting and processing would continue.
However, farmers would not be able to move livestock off their property. Other restrictions include:
  • Restrict effluent on public roads.
  • Tankers and other vehicles to be washed/disinfected before entering your property and upon exit.
  • You would have to record all vehicle and people movements.
  • Essential visitors only – and they must use a property vehicle.
  • Personnel and visitors would be subject to increased hygiene requirements.
Stage two of the response would include a move to a zoning system. A restricted area, control area and outside area would be established. Movement between zones would be heavily restricted.
Rigorous on-farm biosecurity practices would prove critical in the management of the virus in this stage and, if found wanting, may jeopardise milk being collected.
When you consider the severity of these implications you can see why the dairy industry needs to be prepared and aware, but not alarmed.

Preparedness starts with action on-farm

The biosecurity system is even stronger when farmers take action at home too.
Justin Toohey, who is advising ADF on animal health, welfare and biosecurity, also spoke at the breakfast. Mr Toohey said dairy farmers should consider what they can do to benefit their businesses and biosecurity.
He recommends farmers:
  • Remove livestock from tanker tracks.
  • Separate ‘farm’ and ‘visitor’ personnel and vehicles.
  • Install tree belts between farm and neighbour(s).
  • Re-purpose water carriers/pumps for decontamination.

Essentially, dairy farmers should use the coming months and years to create barriers between their animals and the outside world.

Farmers can take action today. Get started by saving the Australian Government’s EAD Watch Hotline (1800 675 888) into your phone.

Biosecurity, Farming operations, Policy & Advocacy

ADF seeks change to Australia’s biosecurity system

By CRAIG HOUGH, STRATEGY & POLICY DIRECTOR, AUSTRALIAN DAIRY FARMERS
Dairy is working alongside partners in the livestock industry and the Australian Government to transform Australia’s biosecurity system.

As globalisation continues to increase the rates of movement of both people and goods into Australia from areas where pests and diseases are more widespread, the risk to our industry is increasing.

Biosecurity affects the profitability and sustainability of our industry. An incursion, of any sort, lowers production, disrupts trade and adversely impacts animal welfare and the mental health of farmers and stakeholders. For example, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimated a widespread FMD outbreak in Australia would have a direct economic impact of around $80 billion.

In August 2022, Australian Dairy Farmers (ADF) made a submission to the Senate’s Rural and Regional Affairs’ committee’s Inquiry into the Adequacy of Australia’s biosecurity measures and response preparedness, in particular with respect to foot-and-mouth disease (FMD).

Our submission endorses, and builds on, the Australian Government’s National Biosecurity Strategy, which provides a 10-year roadmap for significant change to our biosecurity system.

An analysis of various reports from the Inspector General of Biosecurity, the CSIRO, independent reviews and consultation with ADF members and stakeholders informed this submission. For example, the CSIRO report Australia’s Biosecurity Future: Unlocking the next decade of resilience in 2020 found that between 2012 and 2017, the annual number of interceptions of biosecurity risk materials at Australian borders rose by almost 50 per cent. Such an increase in threats requires an increase in capability and efficiency in response.

So, ADF is calling on the Australian Government for additional reforms to the biosecurity system to ensure Australia is fully prepared to respond swiftly to the growing biosecurity threats.

Specifically, our submission calls for everyone to ensure exotic animal diseases do not enter Australia. We call for reforms to governance, funding, disease categorisation, surveillance and detection, diagnostics and vaccine development and a review of compliance measures.

The key recommendations in our submission include:

  • Consolidation of the separate governance models into one biosecurity governance model for animals and one for plants
  • More specific details on what actions and outcomes biosecurity funding is being directed towards to improve funding transparency
  • A commitment from Government for ongoing funding at or above 2016-17 levels in real terms, and to work with industry to explore establishing a dedicated industry biosecurity levy
  • Reinstatement of the 80 per cent screening target at the borders
  • A review of biosecurity infringements and penalties issued over the past decade to determine whether enforcement has been adequate
  • Transforming the Australian Centre for Disease Preparedness into a centre of excellence for vaccine and diagnostics capability for livestock diseases to enhance our ability to develop better vaccines and biosecurity tools
  • Amending the Biosecurity Act 2015 to drive continuous improvement in the system.
  • An explanation of the rationale of these reforms can be found in the ADF submission. A final report from the Senate committee is due to be tabled in the Senate on 24 November 2022.

    As we know, there are no silver bullets for biosecurity. Biosecurity is everyone’s business – it is a shared responsibility. We need adequate measures in place to protect Australia’s agricultural industry from any threats of pests and disease, and this involves working together to protect our farms, livelihoods and natural environment.
    —–
    ADF’s submission can be viewed at: www.aph.gov.au/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transport/FMDBiosecurity/Submissions
    For more about the National Biosecurity Strategy:
    www.biosecurity.gov.au/about/national-biosecurity-committee/nbs

    Labour, People & Community, Policy & Advocacy

    Dairy gets seat on jobs taskforce

    By CRAIG HOUGH, STRATEGY & POLICY DIRECTOR, AUSTRALIAN DAIRY FARMERS

    Resolving workforce shortages in Australian agriculture, including the dairy sector, is a key priority for government, unions and rural industry in 2022/23.

    Over 110 recommendations emerged from the Jobs and Skills Summit in September 2022. These need to be analysed and formalised into a White Paper and funded via the October 2022 Federal Budget. Priority should be given to actions that help resolve worker shortage now like providing $36.1 million in additional funding to accelerate visa processing and resolve the visa backlog.

    Agriculture Minister Murray Watt has announced a new tripartite Agricultural Workforce Working Group. The group brings together the Australian Government, unions and employer groups to generate solutions that better skill, attract, protect and retain workers in the agriculture and processing sectors.

    Through collaboration, the working group will ensure the agricultural sector benefits from announcements made at the Jobs and Skills Summit in relation to skills, migration and worker protections.

    Dairy has secured a place in this milestone taskforce, alongside three other employer groups.

    ADF National Council member Ann Gardiner was named representative for the dairy industry, with an alternate member yet to be nominated. This is a fantastic achievement for the Australian dairy industry.

    Farm workforce shortage dominates dairy conversations
    Although the working group is a crucial step in the right direction, more action is needed. The dairy industry requires immediate support and long-term planning to address the systemic worker shortage.

    This issue is long-standing but has been exacerbated by the pandemic, particularly the Omicron outbreak which saw thousands of workers along the dairy supply chain having to isolate because they have caught COVID-19 or are close contacts.

    The National Agriculture Workforce Strategy, which was launched last December, was welcomed by ADF as it contains 37 recommendations to modernise agriculture’s image, attract and retain workers, embrace innovation, build people’s skills, and treat workers ethically. Most of these recommendations align with the Jobs Summit recommendations. In some instances, the strategy provides a more effective option than the Summit’s proposal. For example, the strategy recommended establishment of a Workforce Data Unit to improve agriculture workforce statistics and forecasting.

    Currently, significant gaps exist like with the ABS’s Job Vacancy data which reports on most sectors but not agriculture. The Jobs Summit acknowledged the issue but proposed a different solution. It recommended the establishment of an independent body called Jobs and Skills Australia to undertake this and other workforce planning tasks. A unit in the department is a preferred option because it is quicker to establish, subject to direct Ministerial oversight and is more cost-effective. It is important that the new working group considers the strategy in its deliberations. Significant work was undertaken by ADF and other agriculture groups to develop the strategy with government. We do not want to see this disregarded just because it was a former government initiative.

    At an agriculture workforce roundtable chaired by Minister Watt in Brisbane back in August, I highlighted the efforts industry is taking to help address the worker crisis. The People in Dairy website provides extensive workforce information for potential and current employees and employers in the industry.

    In September, Dairy Australia launched a new national marketing campaign to promote the benefits of working in dairy farming and encourage Australians to explore a job in dairy. This extension of the Dairy Matters campaign is being delivered into dairying regions across TV, YouTube, radio, social media and local newspapers. We encourage jobseekers to visit www.dairyjobsmatter.com.au for more information.

    All these efforts to bring people to industry – and keep them – are vital to resolving the workforce shortage.

    Farming operations

    Backing our farming operations

    By RICK GLADIGAU, PRESIDENT, AUSTRALIAN DAIRY FARMERS

    SINCE 1942, Australian Dairy Farmers (ADF) has been developing policy, and advocating on issues such as water, climate, biosecurity, energy and animal welfare, to support dairy farmers’ operations.

    To mark ADF’s 80th anniversary it is timely to look back on significant advocacy outcomes.

    One of the great success stories of the Australian industry is the Australian Dairy Herd Improvement Scheme (ADHIS), which was set up in 1979 to progress increased herd genetics. ADF was instrumental in the development of the ADHIS.

    In 2011, ADHIS released Australia’s first Genomic Breeding Values. ADHIS became DataGene in 2016. By 2016, it is estimated that ADHIS had generated $200 million in net benefits to dairy farmers at a cost of about $10 million.

    Another achievement is this publication, the Australian Dairyfarmer magazine. Initially set up in 1984 to communicate Australian Breeding Values (ABVs) for production traits to farmers, it quickly evolved into the go-to source of information, learning tools and community engagement, as it still is today.

    In 2018, ADF adopted the NFF climate policy for an economy-wide target of net zero emissions by 2050 (with conditions). One of these conditions is that Australian and state governments must adequately fund emissions reduction programs and research to enable farmers to utilise new methodologies and technologies to lower greenhouse gas emissions across their business while also increasing farm productivity.

    ADF successfully advocated for an independent analysis of socioeconomic impacts of the Murray Darling Basin Plan in the southern basin. ADF has adopted the National Farmers Federation’s position the plan, so long as the water acquired by the Australian Government achieves good environmental outcomes without harming dairy operations and rural communities. ADF believes a smart and efficient implementation of the plan can generate positive environmental and socio-economic outcomes without the need for the Government to acquire an extra 450 gigalitres (GL). ADF continues to advocate for outcomes-based policymaking for water management to sustain dairy production in the food bowl of Australia.

    In 2020, ADF developed a policy framework that addressed issues for dairy farmers in bushfire management e.g. land clearing, consultation with fire affected farmers and on-the-ground responses to bushfires. The framework considers findings and the implementation of recommendations from bushfire inquiries, including the 2010 Victorian Royal Commission. The framework was shared with the Australian Government to support the nation’s bushfire recovery effort.

    A new approach for managing animal health, welfare
    A fresh approach to the management of Bovine Johne’s disease (BJD) in cattle emerged in 2016 with the release of a framework by Animal Health Australia.

    ADF sought revisions to the framework (which were endorsed), including a focus on a program to assess individual BJD farm status and how to eradicate or manage the disease so as not to bring it on-farm. Further, ADF released a revised risk-profiling score to assess and manage the likelihood of BJD in dairy cattle.

    In 2021, ADF formed a skills-based group tasked with recommending a policy for managing surplus calves in the Australian dairy industry. This work follows the ADF Dairy Beef Forum in July 2021. This forum explored current information, research and business opportunities for surplus calves in Australia. Establishing a policy on surplus calves is a priority in the ADF Strategic Plan.

    An end to routine calving induction that generated high animal health and welfare outcomes was achieved in January 2022. Following a decision in April 2015 to phase-out routine induction by 2022, work by ADF, Dairy Australia, farmers, vets, and processors, together with improved herd improvement practices, tools and technologies, achieved this goal.

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