The percentage of Australian dairy farms reported with negative farm business profit is estimated to have decreased significantly from 67 per cent in 2012-13, to 38 per cent in 2013-14, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

In addition, the ABARES reported a significant jump in the average rate of return on capital (excluding capital appreciation) to 3.1 per cent in 2013–14, up from 0.9 per cent in 2012–13 and above the ten year average of 2.1 per cent.

Released in December 2014, the ‘Australian dairy: financial performance of dairy farms, 2011-12 to 2013-14’ report correlates improved profitability to the strong rebound in the average farm cash income  which increased to $129,000 in 2013-14, around 29 per cent above the 10-year average. Dairy farmers in southern New South Wales, South Australia, Victoria and Tasmania had the largest increases as a result of significant milk price rises, with smaller increases in Western Australia.

Yet, whilst incomes may have ended on a high and negative farm business profit on a low in these states, northern New South Wales and Queensland continue to feel the pinch of higher fodder expenditure and lower production due to dry seasonal conditions, highlighting the relevance of  drought preparedness to long-term profitability.

Australian Dairy Farmers (ADF) President, Noel Campbell said whilst many factors, including drought, impact dairy farm profitability, there are some sound principles we can apply to reduce their effects on our farm business returns, with drought preparedness being one of these.

 “Farmers need to demonstrate a commitment to long-term sustainable farming through appropriate business and farm practices that embrace effective risk management options,” Mr Campbell said.

“The Government can play a key role in reinforcing its long-term commitment to drought through providing policy options that support farmers in risk management, for example, tax incentives to encourage fodder and water infrastructure investment by farmers.”

ADF continues to actively advocate on tax solutions and other complementary measures that may assist in drought preparedness, including improving the Government and industry’s investment in seasonal forecasting.

Further development of the Managing Climate Variability Program, which promises greater accuracy in midseason forecasting, will enable farmers to make better tactical decisions around managing their fodder and water resources to maximise profit.

Mr Campbell welcomed Minister for Agriculture, Barnaby Joyce’s announced $100 million in Drought Recovery Concessional Loans in December 2014 and the lower interest rates on drought concessional loans announced earlier in January this year, however stressed that further proactive measures need to be taken to achieve long-term drought policy and ensure the ongoing viability of our dairy farm businesses.

ADF will continue to lobby for a range of measures to support drought preparedness management and security to ensure that dairy farmers are supported in sustainable farming practices to manage whatever Mother Nature may bring.

*The ABARES report data is gathered from the annual Australian Dairy Industry Survey, with a sample size of approximately 300 dairy farmers.

The “three P’s” of our farming future according to Dr Cameron Archer AM, Principal of Tocal College, are: people, people, people.

Delivering the National Centre for Dairy Education Australia’s (NCDEA) first annual oration on 26 November 2014, Dr Archer underlined the importance of well-educated people in producing a respected product and underpinning the future of Australia’s dairy industry.

“A new technology, a genetic marker, a treatment or medicine, processing method, smart farm technology, breeding strategy, dietary strategy, feed supplements can be around the world in a flash. All of our competitors will have it. What they will do with it – will be up to their people,” Dr Archer said.

“Where we can really have the competitive advantage is through our people.”

Delivered to 90 members of the Australian dairy industry, including the Australian Dairy Farmers (ADF) President and CEO, the oration’s themes reflected ADF’s belief that people are the industry’s most important on-farm asset.

Committed to developing policies and strategies to attract more highly skilled people to dairy, ADF’s People and Human Capacity Policy Advisory Group advocates policies to address Australian dairy’s skilled labour shortage, drive industry innovation and secure long-term prosperity.

NCDEA Manager – Educational Development and oration guest of honour, Sylvia Vagg, was recognised by the Australian dairy industry for her dedicated service to dairy education and training.

Dr Cameron Archer AM, Principal of Tocal College presenting as guest speaker at the NCDEA Oration.

As temperatures rise and grasslands dry, December marks the beginning of Australia’s bushfire season. Bushfires pose significant threats to people, livestock and farming properties, and careful preparation and planning is critical.

Under legislation, landowners and managers have a responsibility for the safety of all people living, working on or visiting their property. Landowners and managers are advised to consider safety, environmental and legal issues, and long-term sustainability with safety as a priority.

To ensure you don’t become overwhelmed with everything that needs to be done in a bushfire crisis, it is important you sit down with someone in your family or your staff and make a list of everything that should be considered and the jobs that need to be done.

On the heels of Coles’ admission to the Australian Competition and Consumer Commission (ACCC) yesterday, Australian Dairy Farmers (ADF) has reiterated the need for stronger competition laws that will protect suppliers against the unjust activities of major retailers.

ADF President, Noel Campbell said that Coles’ announcement was a damning indictment against the supermarket giant, whose actions and continual denial over
the past four years have had significant negative impacts on suppliers and dairy farmers affected by $1 per litre milk.

“Coles has misled Australian consumers and Parliament for too long on this issue,” Mr Campbell said.

“They have finally confirmed what ADF, and others, have long said about their unsustainable $1 per litre milk campaign. This admission does nothing to
rectify the damage they have inflicted upon processors and dairy farmers, who have ultimately paid for their unsustainable price cuts.”

Mr Campbell said the announcement highlighted the need for a Mandatory Code of Conduct with significant penalties and a Supermarket Ombudsman to enforce
the Code.

“Coles must pay suppliers, and ultimately farmers, a fair price for their hard work. They should not be able to force the costs of unsustainable price
cuts onto farmers,” he said.

ADF looks forward to the findings of the Harper Review of Competition Law and Policy,
with the hope that this will foster a fairer supply sector going forward and end unjust practices such as the $1 per litre campaign.

ADF thanked the ACCC for its persistence in pursuing Coles in this matter, and said it will be watching the court proceedings closely.

The Australian dairy industry launched new breeding tools to support the National Breeding Objective (NBO) at the ADIC Industry Leaders Breakfast in Melbourne
on 28 November 2014.

Developed by the NBO Task Force and driven by the Australian Dairy Improvement Scheme (ADHIS) after
an extensive consultation process with dairy farmers from across all dairying regions, the NBO aims to deliver profitable herds that the Australian
dairy industry needs for the future.

Genetic gains deliver 30 per cent of productivity improvements on Australian farms, with the estimated gap between actual and potential genetic gains worth
$25 million per year in extra farmer profits ⁱ.

Offering a practical breeding index, which includes the breeding traits farmers want to improve in their herds, the NBO is designed to close this gap,
and increase net farm profit via genetic gain.

General Manager of ADHIS, Daniel Abernethy said the three indices; a Balanced Performance Index, a Type Weighted Index and a Health Weighted Index were
designed to align with farmers’ different breeding priorities.

“The Balanced Performance Index achieves the NBO for farm profit and will align to the breeding priorities of most Australian dairy farmers,” Mr Abernethy
said.

“Two additional breeding indices have been developed to meet the needs of those farmers whose breeding philosophies focus on type or health.”

ADIC Chair, Noel Campbell said the level of farmer and industry involvement in developing the Breeding Objective is a testament to the entire supply chain’s
commitment to securing a more profitable future for dairy.

“The direct input of farmers, processors and research and development bodies through participation in farmwalks, surveys and forums has directly impacted
the outcome of the NBO,” Mr Campbell explained.

“Investment in innovative genetics strategies such as the NBO and research outcomes from the Dairy Futures CRC will help our farmers to breed the type
of cow they want to milk, faster, which will improve the productivity and profitability of our herds.”

While existing programs like the Australian Breeding Values express a bull or cow’s genetic potential for a single trait such as fertility or protein kilograms,
most farmers want to improve more than one trait in their herd.

The new index will be used to rank bulls, cows and herds for breeding programs.

ADHIS is an initiative of Australian Dairy Farmers’, that receives the majority of its funding from Dairy Australia through the Dairy Services Levy.

A summary of the National Breeding Objective is available via the ADHIS website.

ⁱ Report Commissioned by Dairy Australia, Coats, S & Lacey, R., 2013, Development of Genetics Scenarios and Implications for the Australian Dairy Industry, 13 August 2013.

In December, the news of the tragic death of a child possibly linked to drinking raw milk, saddened the dairy industry and underscored the message that consumers should only drink pasteurised milk.

“Farmers, familiar with their cows and own farm hygiene practises, are known to drink fresh milk directly from their dairy but the law is very clear that the packaging, transport and selling of raw, unpasteurised milk for human consumption is illegal,” says Helen Dornom Sustainability Manager for Dairy Australia.

“Milk is a highly regulated biological product in part because of the potential growth of pathogens during storage and transport. It is important to reemphasise that unpasteurised milk can never be consumed without real risks,” she adds.

“As farmers and representatives of the industry we have to be careful not to give the impression that something a farmer might do on-farm and fully aware of the risks can safely translate to the broader community.

Unpasteurised milk has been bottled and sold as cosmetic products (labelled ‘bath milk’, ‘for cosmetic purposes only’ or ‘not for human consumption’). While the sale of these products is not illegal, consumption of the product can present a serious risk to the consumer’s health.

“The fact is that cosmetic or ‘bath milk’ is not produced under the strict standards or supervision applied to the dairy food industry and without the additional critical controls provided by pasteurisation or equivalent treatments. It may contain pathogenic bacteria that can lead to life-threatening illnesses,” says Ms Dornom.

“Everyone is vulnerable to illness caused by organisms that may be present in raw milk, but the risks are even greater for young children and for people who are elderly or those who have underlying health problems, are Immune compromised or are pregnant.”

The Australian dairy industry has a well-earned reputation for safe dairy products – let’s not jeopardise this and ensure consumers only drink pasteurised milk.

For more information about raw milk, click here.

As 2014 draws to a close, I would like to take the opportunity to personally thank all of the dairy farmers who have actively supported our commitment towards improving the profitability and sustainability of our industry over the past 12 months.

It has been an absolute privilege to work alongside many of you this year, developing and implementing sound national policies to improve dairy farming in Australia. In collaboration with the ADF Board, National Council and the five Policy Advisory Groups (PAGs), we have achieved numerous major successes in 2014.

Highlights include the repeal of the Carbon Tax, the National Dairy Farmers’ Summit and the development of the industry’s very first Australian Dairy Vision. The recent signing of the China-Australia Free Trade Agreement with its pro-dairy outcome is another example of the positive changes our collective industry advocacy has made.

I encourage you all to read ADF’s 2013-14 Annual Review for more detailed information about these highlights and other activities over the last reporting period.

On a personal note, I would like to recognise the significant contribution of Chris Griffin and Peter Evans, two invaluable members of our industry who are stepping down from their important roles on the ADF Board. I would also like to welcome newly appointed ADF Directors, David Basham and Tyran Jones, along with reappointed Director, Simone Jolliffe.

From the whole ADF team, we wish you a safe and happy festive season. Merry Christmas and a prosperous New Year to all!

The Australian Dairy Industry Sustainability Framework outlines the industry’s commitment to enhance livelihoods, improve wellbeing and reduce our environmental footprint.

To ensure dairy is recognised worldwide as a responsible, responsive and prosperous producer of nutritious food, the Framework sets 11 economic, social and environmental targets to be achieved by the year 2020.

The second Sustainability Framework Progress Report is due to be released in December to benchmark how the industry is tracking towards achieving these targets, including supporting case studies to back these findings.

The ADF Update had the opportunity to preview some of the report’s preliminary findings, which can be found below.

ü  14.5% reduction in volume of green house gas emissions intensity generated by dairy manufacturers’ use of fuel and electricity since 2010/11 – a 30% reduction is the target set by 2020.

ü  46% of on-farm and factory workers now have a documented occupational health and safety (OH&S) plan – by 2020, the framework aims for 100% to have completed OH&S training.

ü  56% of farmers are aware of a new set of animal welfare standards and guidelines for cattle that have been developed – whilst yet to be legislated, the industry seeks 100% compliance with the guidelines’ standards by 2020.

ü  10.5% reduction in water consumption since 2010/11 – a 20% reduction by 2020 is the target set for the manufacturing sector.

ü  44.5% reduction in waste to landfill by manufacturers since 2010/11, which has already met and exceeded the target of a 40% reduction by 2020.

Dairy Industry Sustainability Framework Steering Committee Chair, Chris Griffin said the 2014 Progress Report provides evidence the dairy industry is committed to delivering mutually beneficial outcomes for the community and the environment.

“The Report demonstrates the benefits of the value chain working together to help create value for our industry, our customers and the community,” Mr Griffin said.

“Built on existing industry activities, we hope it will provide guidance to farmers, dairy companies and industry bodies on achieving our shared priorities and commitments.”

To view the 2014 Progress Report online, stay tuned to www.australiandairyfarmers.com.au over the coming week.

The Australian dairy industry has recently farewelled two long-standing leaders; dedicated dairy farmers; husbands; fathers; and grandfathers… But most of all, two “top blokes”.

Officially stepping down from their roles as Directors on the ADF Board at the end of 2014, together  Chris Griffin and Peter Evans have served over 70 remarkable years as dairy leaders.

ADF Chair, Noel Campbell said their presence will be missed.

“Their tireless efforts and unrelenting dedication to improving and promoting our great industry over many years has not gone unnoticed,” Mr Campbell said.

With more than 35 years experience in dairying on his farm at Westbury, Gippsland, Mr Griffin has led dairy through tough times of drought and the milk price wars. He has also opened our eyes to the possibilities of the future, in new markets, new technology and innovative on-farm practices.  

Chris Griffin on his Gippsland dairy farm, Victoria

Mr Griffin, who has served as a member of the ADF Board since 2005, is the immediate past President of ADF, and former Chair of the ADIC, said the industry was full of people who care.

“People join these organisations because they are vehicles for getting things done… This is an industry in great hands and I’ll be watching with keen interest,” Mr Griffin said.

West Australian dairy farmer, Mr Evans has been active in farmers associations since 1978 and has held many notable industry positions, including having served on the ADF Board since 2007 and in the role of ADF Vice President from 2011 to 2012.

Peter Evans receiving the 2014 WA Milk Bottle Award

Most recently winner of the prestigious WA Milk Bottle Award for outstanding service to the dairy industry earlier this year, Mr Evans said he never considered himself to be a “political animal”.

“I never considered myself to be a political animal but because of poor politics in WA (at the time of industry deregulation), I found advocacy a great tool for getting things done.

“Now into my seventh year on the ADF Board, we are far from perfect but our policies are having better traction with Government than ever before,” Mr Evans said.

ADF wishes the retired Directors all the best as they look to spend more time with their families, travelling and on-farm. 

The Australian dairy industry sends its condolences to Lynne Kosky’s family, after she passed away on 4 December.

Ms Kosky, former Minister for Transport in the Brumby Government, will be remembered by Victorian farmers for her work on the state’s regional rail and transport plan.

Outside of her political career, after retiring from Parliament in 2010 due to illness, Ms Kosky was the inaugural Dairy Industry People Development Council (DIPDC) Chair until she stepped down earlier this year.

DIPDC Chair, John Versteden said Ms Kosky provided invaluable industry leadership in the people development advocacy area, “a bold industry initiative that had been difficult to navigate through in previous years”.

“Aside from her strong leadership skills and networks, Lynne’s genuine empathy and passion in the people development field provided the solid foundation upon which the Dairy Industry People Development Council was formed,” Mr Versteden said.

“The dairy industry has lost an extremely valuable friend and she will be sorely missed.”

As New Zealand (NZ) Prime Minister, John Key has reportedly been working to ensure NZ’s dairy industry receives equal benefits to our industry, it’s clear that Australia’s free trade agreement (FTA) with China has weighed up very well.

With negotiations concluded and a Declaration of Intent signed on 17 November, the China-Australia FTA has delivered a significant confidence boost to the whole dairy value chain, with the outcomes presenting real opportunities for dairy to grow and prosper.

So what does the deal promise and how does it compare to NZ’s existing FTA with China?

While the FTA is currently in its legal review phase, it has secured the following tariff outcomes:

• Elimination of the 15% tariff on infant formula over 4 years;
•  Elimination of the 10 ‐ 19% tariff on ice cream, lactose, casein and milk albumins over 4 years;
• Elimination of the 15% tariff on liquid milk over 9 years;
• Elimination of the 10 ‐ 15% tariff on cheese, butter and yogurt over 9 years; and
• Elimination of the 10% tariff on milk powders over 11 years.

In comparison to our trade deal, the China-NZ FTA contains restrictive safeguard measures on a wide range of dairy products, including liquid milk, cheese, butter and all milk powders. These safeguards or quotas mean that China raises the tariff back to the normal rate when NZ’s exports exceed a certain volume of product.

The prosperity of the Australian dairy industry is underpinned by the profitability of the cows farmers milk. New breeding indices set an exciting path for genetic improvement in Australia.

Developed by the National Breeding Objective (NBO) Task Force and driven by the Australian Dairy Improvement Scheme (ADHIS) after an extensive consultation process with dairy farmers from across all dairying regions, the NBO aims to deliver herds that the Australian dairy industry needs for the future.

Three new breeding indices will be released from April 2015. The Balanced Performance Index (BPI) will replace the Australian Profit Ranking and aims to achieve farm profit through a balance of longevity, health, type and efficient production. Two additional indices will also be introduced to align with specific breeding philosophies, namely the Health Weighted Index (HWI) and the Type Weighted Index (TWI).

Officially launched at the Australian Dairy Industry Council (ADIC) Industry Leaders’ Breakfast, ADHIS General Manager, Daniel Abernethy said the new indices are backed by strong science and are in line with farmer trait preferences.

“For the first time, farmers and their advisors directly contributed towards the NBO’s development through initiatives including Australia’s Longest Farmwalk and a sector wide survey to ensure the indices are well suited for the future needs of farmers,” Mr Abernethy said.

In another industry first, the new breeding indices now also include feed efficiency – a new trait which has been developed through ground breaking research from the Dairy Futures CRC and the Department of Environment and Primary Industries Victoria, supported by Dairy Australia and The Geoffrey Gardiner Foundation.

For more information and to download a copy of the NBO, click here.