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Dairy farmers to power on with Federal energy grants

June 23, 2020

DAIRY farmers now have access to $10 million in Federal Government grants to help lower their energy bills and reduce emissions, as part of a multi-million-dollar election commitment welcomed by peak dairy farmer group Australian Dairy Farmers (ADF).

The Federal Government announced that grants of up to $20,000 would be available for dairy farm businesses to save energy by:

  • Replacing existing equipment with higher efficiency equipment;
  • Installing or replacing components to help an existing system run more efficiently;
  • Carrying out on-farm audits; and
  • Monitoring energy use and emissions.

Funding for this program will be distributed between states in proportion to the number of dairy farms in each jurisdiction.

ADF President Terry Richardson welcomed the announcement, which fulfils a request made by the farmer group in its 2019 federal election platform.

“Dairy farmers are facing pressure from high production costs that are, in many cases, outstripping their income,” ADF President Terry Richardson said.

“We called on the Government to provide relief to businesses installing or upgrading to more energy efficient or renewable energy systems. These grants will not only mitigate the excessive cost of energy, but also contribute to the dairy industry’s target to reduce emissions by 30 per cent by 2030.”

The grants are part of a $22 million support package promised to dairy farmers in the lead up to last year’s election, which also included over $1 million in projects to be delivered by ADF.

“We have been working with the Government since the last election to ensure that these projects, including a new dairy industry trading platform and a real-time payment and information sharing capacity utilising Blockchain technology, are rolled out to benefit all dairy farmers and the wider industry,” Mr Richardson said.

“These projects will utilise new technology and create a more level playing field between all parts of the dairy supply chain, in line with recommendations made by the ACCC (Australian Competition and Consumer Commission) in its Dairy Inquiry.”

Further guidelines and application forms for the energy grants are available here, or by telephone on 13 28 46. Applications will close on 17 August 2020.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

National Dairy Farmer Survey shows an industry in recovery

June 17, 2020

DAIRY farmers are feeling more confident now than last year about the state of their own businesses and the future of the industry as a whole, the latest annual National Dairy Farmer Survey has confirmed.

While confidence remains lower than in 2018 and 2017, more than two thirds of farmers surveyed (67 per cent) reported feeling positive about their businesses, a massive 22 per cent jump from last year, while 44 per cent felt good about the future of the industry.

This is a marked improvement from last year, when just 34 per cent felt positive about the industry’s future in the survey’s worst ever result, but still far below the historic high of 78 per cent recorded in the 2008 survey, before the Global Financial Crisis.

Peak dairy farmer group Australian Dairy Farmers (ADF) President Terry Richardson said the survey results were a welcome boost from last year.

“These survey results show a dairy industry in recovery, although it is unclear whether this confidence will continue to grow in a post-pandemic environment,” Mr Richardson said.

Dairy Australia’s June Situation and Outlook Report, released today, confirmed that demand for dairy remained strong during the panic buying that accompanied the COVID-19 pandemic.

“The industry is still facing some considerable challenges, but this is a positive outlook for the future, with dairy products remaining a staple household item.”

Encouragingly, 70 per cent of farmers recorded in this year’s survey expected to make a profit, up from 43 per cent last year, while 48 per cent of farms anticipated an increase in production volumes for the year ending June 2020.

“It appears farmers are recovering from recent production losses and encouragingly, some farmers are actively entering an expansion phase, even as many continue to battle drought, high feed and water costs, and other elements,” Mr Richardson said.

“A confident industry is a key objective of the Australian Dairy Plan, with a goal to boost milk production up to 9.3 billion litres per year by 2024-25,” Mr Richardson said.

“There are a lot of factors involved in sustaining a confident industry. But if the trend in farmer confidence continues, I have no doubt that we can achieve our goal over the next five years.”

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

ADF welcomes Woolworths’ extension of 10c/L milk levy

June 1, 2020

PEAK dairy farmer group Australian Dairy Farmers (ADF) has supported today’s announcement by supermarket retailer Woolworths to extend its 10 cent per litre levy on discount milk.

“We’re pleased that Woolworths has made a public commitment to continue distributing an extra 10 cents per litre on its Home Brand milk back to farmers, but in the long term we want to see this initiative built into the farm gate milk price,” ADF chief executive David Inall said.

Woolworths said today in a statement that the retailer expected to contribute another $30 million to dairy farmers over the next 12 months, on top of the $50 million already delivered.

The retailer first raised the price of its generic milk line by 10 cents per litre in 2018, with the full increase going back to dairy farmers who were coping with the devastating impacts of drought. Woolworths later committed to continue the arrangement in February 2019.

“We are now looking for Coles, ALDI and other retailers to follow Woolworths’ lead and publicly state their commitment to continue their arrangements,” Mr Inall said.

ADF, in a submission last year to the Senate inquiry into the performance of the dairy industry since deregulation, recommended that the price of generic milk brands be raised to $1.50 per litre until changes are made to the Food and Grocery Code to establish appropriate value distribution up the supply chain to dairy farmers

“If we are to stop farm exits and hardship, then all retailers need to increase the price of their store brand retail fresh milk to $1.50 per litre with the increase going back to farmers via their processors,” Mr Inall said.

Mr Inall said ADF also looked forward to working with Woolworths on future initiatives to maintain a sustainable dairy industry, including a new $5 million fund to provide infrastructure and technology grants to dairy farmers to help improve on-farm efficiency and profitability.

“This new fund is obviously welcome and Woolworths has committed to engage with dairy industry stakeholders on the design of the new program, so we look forward to working with them wherever we can,” he said.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

New milk supply agreements must comply with dairy code

May 28, 2020

PEAK dairy farmer group Australian Dairy Farmers (ADF) is reminding farmers and processors to ensure all new milk supply agreements comply with the industry’s mandatory Code of Conduct.

The Code of Conduct, which came into effect on January 1 2020, requires most dairy processors to publish standard form milk supply agreements on their websites by June 1.

A standard form milk supply agreement template, developed by ADF, was released earlier this month. The farmer group was contracted by the Federal Government to develop a template that incorporates all elements of the Code and can be used by farmers and processors in negotiating contracts.

“It is extremely important that farmers and processors comply with the Code of Conduct so that they don’t risk being penalised in a way that could jeopardise their business,” ADF President Terry Richardson said.

The Australian Competition and Consumer Commission (ACCC) is responsible for enforcing the Code and investigating alleged breaches.

The competition watchdog, in its 2018 dairy inquiry, made several recommendations related to contracting practices, including that milk supply arrangements should be acknowledged in writing, processors should provide farmers with all contractual documents before the start of their agreement, and that those agreements should be simplified.

The Code does not apply to farmers and processors with a milk supply agreement that was entered into before January 1 2020, unless that contract is varied or renewed.

All contracts, no matter when they were entered into, must be compliant with the Code from January 1 2021.

Farmers or processors can contact the ACCC on 1300 302 021 to report alleged non-compliance.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Australian Dairy Farmers statement on 40 cents per litre milk levy proposal

May 19, 2020

MEDIA stories this week concerning Australian Dairy Farmers’ (ADF) involvement in a proposed 40 cents per litre levy on milk are inaccurate and grossly out of context.

ADF officially received this proposal from our Victorian state member, the United Dairyfarmers of Victoria (UDV) on Sunday 10 May 2020. Any previous interactions or knowledge regarding this proposal were subject to confidentiality, which we respected. We are extremely disappointed to now read that ADF allegedly did not act fast enough in assessing this proposal. ADF receives many proposals and ideas to help maintain a sustainable dairy industry. We appreciate the effort of anyone who takes an interest in our industry, and we assess the merits of all proposals.

ADF is a national organisation consisting of six state dairy farming organisations. It is our responsibility to consider the views of each state’s dairy industry, including their positions on regulation. This is an extremely complex and sensitive issue, which requires proper consideration by ADF and our members.

Since the introduction of discount milk in 2011, more than 1,500 Australian dairy farms have left the industry. We recognise the severity of this issue and are treating it as an urgent priority. ADF has a duty to investigate any and all policy scenarios that may have an impact on the dairy industry. This includes assessing options to inform market support measures, such as consideration of any proposal involving government-imposed levies.

Any criticism of ADF being slow to act on $1 milk is simply wrong. ADF has been at the centre of this debate since supermarket retailers introduced their discount milk marketing campaigns in 2011.

ADF and our state members played an integral role in urging retailers to increase the price of discount milk to $1.10 per litre with the full increase being passed back to farmers via their processor. Furthermore, in November 2019, ADF lodged a considerable submission to the Senate inquiry into the performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000 where, among other recommendations, we called on retailers to lift the price of generic branded milk to $1.50 per litre.

These matters should rightly be discussed between industry and government, and not through public debates of this nature.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

New milk supply agreement template will help dairy farmers and processors comply with mandatory industry code

May 15, 2020

PEAK dairy farmer group Australian Dairy Farmers (ADF) has today released a standard form contract template for farmers and processors to use in negotiating milk supply agreements under the requirements set by the industry’s mandatory Code of Conduct.

The ADF template, which was sponsored by the Federal Government, is intended to safeguard both farmers and processors from potential breaches of the Code, while also addressing other issues identified by the Australian Competition and Consumer Commission (ACCC) in its Dairy Inquiry.

“Farmers and processors won’t have to spend time developing new agreements from scratch, although the document isn’t a substitute for legal advice and we recommend parties seek out appropriate legal advice in relation to matters set out in the template,” ADF President Terry Richardson said.

The competition watchdog made several recommendations related to contracting practices, including that milk supply arrangements should be acknowledged in writing, processors should provide farmers with all contractual documents before the start of their agreement, and that those agreements should be simplified.

The template incorporates contractual obligations in the code and several other requirements that typically feature in a standard agreement. For example, the template expands on the code’s confidentiality requirements. This provides greater coverage for farmers and processors

Mr Richardson said he expected farmers to have questions about the template, with ADF holding a series of nine webinars to talk directly to farmers, with services body Dairy Australia also developing useful resources.

“We will be encouraging farmers and processors to use this template and seek further information from ADF, either by attending one of the information sessions when they are organised, or by contacting our office,” he said.

The milk supply agreement template is available here

The webinars will be held at the following times. Registration details will be released shortly.

Wednesday 20 May

  • 9:00am-10:00am
  • 11:00am-12:00pm
  • 1:00pm-2:00pm

Friday 22 May

  • 9:00am-10:00am
  • 11:00am-12:00pm
  • 1:00pm-2:00pm

Monday 25 May

  • 9:00am-10:00am
  • 11:00am-12:00pm
  • 1:00pm-2:00pm

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Farmers urge supermarkets to move on discount milk

May 6, 2020

SUPERMARKETS need to support a dairy industry that is coping with the impacts of bushfires and ongoing drought, says Australia’s peak dairy farmer group.

National advocacy body Australian Dairy Farmers (ADF) has renewed calls for supermarkets to increase the retail price of discount milk to $1.50 per litre, with the increase going back to farmers.

“Farmers have been hit hard by the impacts of drought, bushfires, and of course high production costs,” ADF chief executive David Inall said.

“The price farmers pay for energy, and water and fodder for their cows remains high, but the retail price for their milk has stayed stubbornly low for almost a decade.”

Major retailers, led by Woolworths and Coles, last year increased the price of their private label milk brands from $1 per litre to $1.10 per litre, with farmers getting the full increase.

But Mr Inall said increasing the retail price of discount milk further to $1.50 per litre would reflect the inflation rises farmers should have received over the last decade to account for the current cost of production.

“We lost nearly 500 dairy farms in one year between 2017/18 and 2018/19 and since 2011, we have lost more than 1,500,” he said.

“Since 2011, the average profit for a dairy farm in Australia has been $41,553 per annum.

“If we are to stop farm exits and hardship, then retailers need to increase the price of their store brand retail fresh milk to $1.50 per litre with the increase going back to farmers via their processors.”

Federal Agriculture Minister David Littleproud this morning called for a voluntary levy to support dairy farmers, arguing that it would allow the market to respond, with consumers making purchasing decisions that benefit farmers.

Mr Inall said the country’s approximate 5,200 dairy farmers appreciated the support of the Federal Government.

“It is fantastic to see that the Federal Government recognises this is a major issue for the industry and is prepared to continue pushing for dairy farmers to receive a fairer price for their product,” he said.

“The retail prices of other fresh food products tend to fluctuate with demand, but the shelf price of milk has remained relatively flat.”

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Dairy farmers welcome new federal ministers

February 6, 2020

AUSTRALIAN Dairy Farmers (ADF) welcomes the return of David Littleproud to the agriculture portfolio, following his election on Tuesday as Deputy Leader of the Nationals.

Minister Littleproud has been a strong supporter of the dairy industry, particularly in our fight to break the back of discount supermarket products that have plagued dairy farmers for almost a decade.

We look forward to working with Minister Littleproud on key projects for the dairy industry, including delivering on election commitments that are now underway, such as exploring new ways in which the dairy industry can trade milk. There are a range of significant challenges that continue to impact on Australia’s dairy farmers and we look forward to exploring appropriate solutions with the Minister.

ADF is also looking forward to working with new Water Minister Keith Pitt. Water is a priority for the dairy industry, with nearly 25 per cent of Australia’s total milk production occurring in the Murray Darling Basin contributing more than $2.6 billion to the economy.

We want to thank Senator Bridget McKenzie for her commitment to agriculture. During Senator McKenzie’s tenure as Minister for Agriculture, the dairy industry’s mandatory code of conduct was finalised as well as initiating a review of industry service organisations.

Media contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Farmers gain vital protections under mandatory dairy code

December 13, 2019

FARMERS will be protected by a slew of measures to improve transparency and set minimum standards of conduct in milk supply agreements under the dairy industry’s new mandatory code of conduct, to come into force from January 1 next year.

The final code, unveiled today by federal agriculture minister Bridget McKenzie with the support of national dairy advocacy group Australian Dairy Farmers (ADF) and all state dairy farmer organisations, includes provisions that:

  • All parties must deal with each other fairly and in good faith;
  • Bans retrospective step-downs;
  • A cooling off period is 14 days;
  • Stops processors from making unilateral changes to agreements, except when required to comply with legislative changes which cannot reduce the minimum milk price, or in certain exceptional circumstances that reduces the minimum price, with the processor required to notify the competition watchdog and farmer, who must be allowed to terminate the agreement if they wish;
  • Processors must publicly release a Standard Form Agreement on June 1 each year, covering the terms of milk supply and a price (or prices) that cover the terms of the agreement;
  • Bans exclusive supply arrangements between processors and farmers in combination with either two-tier pricing (where the second tier is less) or volumetric limits by processors;
  • Bans processors from withholding loyalty payments to farmers if a farmer switches processors;
  • Introduces a dispute resolution process for matters arising under or in connection with agreements; and
  • Make civil penalties available for certain provisions imposing obligations on parties to an agreement to allow the competition watchdog to issue infringement notices, recognising in penalty regimes the respective size of processors and farmers.

ADF CEO David Inall thanked the Federal Government for listening to the concerns raised by dairy industry representatives following the release last month of the exposure draft code of conduct.

“The final code of conduct addresses our concerns and provides important protections for farmers when negotiating milk supply agreements with their processors,” Mr Inall said.

The Australian Competition and Consumer Commission (ACCC), which last year recommended the dairy industry transition from a voluntary to a mandatory code, will be tasked with monitoring and enforcing compliance with the code, consistent with its duties under other industry codes of conduct, including such as the horticulture code.

“While the mandatory code will not be responsible for setting the farm gate milk price, it will go some way to improving the bargaining power of farmers and professionalising contract management in the industry.”

ADF, initially working through industry body the Australian Dairy Industry Council (ADIC) has been intimately involved in the development of the code of conduct. The farmer group constructed the industry’s original voluntary code in 2017 before preparing a draft code, much of which was used by the Government to develop the final code of conduct.

“Our goal is to ensure that farmers are protected by the mandatory code of conduct and to do all we can to avoid a repeat of the 2016 milk,” Mr Inall said.

“The ACCC identified that farmers lacked bargaining power when negotiating contracts and we believe that this will be significantly improved with this mandatory code of conduct.”

All existing milk supply agreements must be compliant with the mandatory code within 12 months of the code coming into effect.

Announcement of new Australian Dairy Farmers board members

November 28, 2019

PEAK dairy farmer group Australian Dairy Farmers (ADF) today announced South Australian farmer Rick Gladigau has been elected to a three-year appointment to its five-member board, while independent director Victoria Taylor was re-elected for a two-year term.

Mr Gladigau has been a board member of state dairy farmer organisation South Australian Dairyfarmers Association (SADA) since 2007 and is currently the organisatiofn’s treasurer. He also sits on the National Farmers’ Federation’s Trade Committee and the ADF Markets, Trade and Value Chain Policy Advisory Group.

Previously, Mr Gladigau was a South Australian representative on the Dairy Farmers Co- operative Board from 2013-2016 and was chair of the company’s milk pricing committee during his tenure.

Victoria Taylor is a graduate of the Australian Institute of Company Directors’ Company Directors Course and former Executive Director of the Ricegrowers’ Association of Australia and now owns a business that provides strategic policy and communications support to clients in primary industries. She is a ministerial appointment to the Rice Marketing Board for the State of NSW and an Independent Director of the Safety Institute of Australia.

ADF President Terry Richardson welcomed the appointments of Mr Gladigau and Ms Taylor. “I am pleased to announce Rick as a new appointee to the ADF Board,” Mr Richardson said.

“Both Rick and Victoria bring a wealth of experience to ADF and on behalf of the Board, I look forward to working with them as ADF continues to advocate on behalf of dairy farmers.”

Mr Gladigau will replace retiring ADF Board member and former ADF President Simone Jolliffe, who is stepping down after six years on the board of the dairy advocacy group.

Mr Richardson praised Ms Jolliffe’s contribution to the industry during her tenure on the ADF Board.

“I am grateful for Simone’s dedication and commitment to ADF and the broader dairy industry over the past six years” Mr Richardson said.

“Simone has played an integral role in guiding ADF through a busy time in the Australian dairy industry.”

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Australian Dairy Farmers responds to floor price debate

November 13, 2019

AUSTRALIAN Dairy Farmers (ADF) welcomes the deeply held concerns by those in the Australian Parliament and the community regarding the well-being of dairy farmers. There is a desperate cash flow crisis for many dairy farmers, which also impacts on local communities. Dairy farmers’ input costs have risen markedly in recent years (for example: feed, water, energy, labour) and farmers have worn many of the costs of living in Australia and contributing to the country’s food security.

ADF has previously stated that there are challenges, domestically and internationally, associated with the establishment of a milk floor price. There are a multitude of factors that come into play when processors set milk prices, and we must ensure that we are competitive with other dairy export countries. We must recognise the needs of a modern, globally competitive and sustainable industry, and in that context, there may be several mechanisms that deliver that outcome.

A floor price is one instrument that could be considered. However, these are complex, historical challenges that need to be comprehensively explored. We have a fair way to go in resolving these issues, but not a lot of time, and these problems won’t be fixed via parliamentary debate alone. There is a Senate Inquiry pending on this matter which should assist in bringing some of these issues into the public domain, and decisions should not be made prior to a fully informed and proper consideration of the facts.

There are currently several government assistance programs for dairy farmers. The Farm Household Allowance provides up to three (soon to be four) years of income support for farmers and their families experiencing hardship. Rural Financial Counselling Services are a free mobile workforce help identify and farmers’ financial and business options. The Regional Investment Corporation offers investment and drought loans for farmers. Some states also offer concessional loans for farmers in drought- affected areas.

The dairy industry was also promised a $22 million package by the Coalition Government before the May 2019 election. The package included over $1 million in projects to be delivered by ADF, including developing a payment system using blockchain technology and a standard form contract that complies with the industry’s mandatory code of conduct, and facilitating the development of a new dairy industry trading platform. The package also included $10 million to support dairy farmers investing in more energy efficient equipment and $3 million in grants to assist farmer groups in establishing collaborative business models.

ADF works closely with its six state dairy farmer organisation members on a range of initiatives with the objective of improving the well-being of dairy farmers. This year has seen considerable activity in the area of retail pricing with amplified efforts in the retail dairy cabinet space. ADF and its members see considerable scope and opportunity to better promote Australian dairy products, and retailers must be willing to explore all options that foster a profitable, sustainable dairy industry.

There is unclear and varied support to either fully or partially re-regulate the industry as there are countless complex factors involved in doing so, many of which have not been considered in detail. This is critical, not just for those dairy farmers supplying fresh milk contracts, but for all dairy farmers, regardless of the destination of their milk.

What is clear is that dairy farmers must be able to better engage with the marketplace and extract greater value. This is our chance to look at appropriate structural reform in a bipartisan manner. Mechanisms must be identified and adopted that deliver transparency in setting farm gate prices and equitable income back to farmers.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

Australian Dairy Farmers statement on re-regulating the dairy industry

October 15, 2019

AUSTRALIAN Dairy Farmers (ADF) welcomes the recognition that dairy farmers are doing it tough, with sustained high input costs and flat farmgate returns leading to increasing numbers of farmers exiting the industry.

ADF does not have policy to support re-regulation of the Australian dairy industry. We have supported the Mandatory Code of Conduct and we look forward to the Government’s draft code, which we expect will be released shortly for comment.

The industry supported de-regulation nearly 20 years ago. The federal Government initiated the Dairy Structural Adjustment Program, which provided $1.63 billion in payments to farmers, and the Supplementary Dairy Assistance Package, which provided a further $120 million to farmers, to make the transition to a deregulated environment.

We will continue to work with our state member organisations, the Government and Opposition, Senator Pauline Hanson as well as other representatives in Canberra to ensure that all suitable action be taken to secure the sustainability of dairy farmers. Sustainable pricing through the supply chain is paramount and we will continue, in concert with our members and the Government, to identify the most suitable actions that support dairy farmers.

Clearly this is an extremely complex policy discussion, particularly given our export exposure. However, it is important to note that the dairy the industry is at a critical point and these issues must be addressed.

Media Contact:

Ashley Mackinnon, Public Affairs Manager

M: 0407 766 153

E: media@australiandairyfarmers.com.au

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