The Australian dairy industry and dairy communities face a severe and disproportionate threat from continued water buybacks under the Murray-Darling Basin Plan, new research has found.

The independent, evidence-based analysis is the first of its kind to focus on dairy and the implications across the supply chain.

Conducted by global consultancy Ricardo, it confirms the industry’s concerns: water buybacks aren’t just a policy lever. They are an indiscriminate force with far-reaching economic and social consequences.

Australian Dairy Industry Council (ADIC) Chair Ben Bennett said the modelling presented two realistic buyback scenarios – returning 302GL or 683GL of water – both of which would cause irreversible damage to dairy farmers, dairy processors and dairy communities.

“The report has found buybacks would reduce the consumptive water pool by seven to 16 per cent, pushing water allocation prices up by 17 to 40 per cent, especially during dry years,” Mr Bennett said.

“These higher input costs, for water and feed, severely erode farm profitability, particularly for those with low water entitlement ownership.

“Under extreme dry conditions, like we are seeing now in parts of the southern basin, some dairy farms could experience financial losses of up to 535 per cent, or more than $430,000 in a single year.”

The modelling also shows a reduction in milk production of three to 15 per cent – translating to a loss of 60 to 270 million litres annually.

ADIC Deputy Chair John Williams said the impact of this on dairy processors revenue was modelled at up to $545 million each year.

“Reduced milk supply exacerbates existing overcapacity, leading to higher unit costs, greater competition for milk, rising transport costs, and a higher risk of plant closures,” Mr Williams said

“The effects from dairy farm and processor spending cuts flow right through rural communities, particularly to rural suppliers and service providers, threatening local jobs, business viability, and the broader regional economy.”

The ADIC is calling on the Australian Government to immediately halt further buybacks and instead implement a smarter, more balanced water recovery plan that strikes the right balance between environmental outcomes, food production and the long-term resilience of regional community.

“A whole-of-industry and government approach is critical to safeguarding the future of Australian dairy, and the communities and businesses that rely on it,” Mr Bennett said.

Read the full report here and view the fact sheet here.

The Australian Dairy Industry Council (ADIC) is proud to announce respected dairy consultant John Mulvany has been awarded the prestigious 2024 ADIC Outstanding Service Award.

The accolade recognises his exceptional leadership, dedication, and significant contributions to the Australian dairy industry over three decades.

ADIC Chair, Ben Bennett said Mr Mulvany became known for an unwavering commitment to developing profitable and resilient farming practices and ensuring better outcomes for his clients.

“John took a holistic approach in working towards better outcomes for dairy farmers,” Mr Bennett said.

“He’s worked with farmers and farm businesses of all sizes across the country, helping achieve their dreams and improve their operations.

“Most would agree he brought wit, humour and a strong focus in his approach to consulting.”

Mr Bennett said Mr Mulvany’s contributions extend beyond individual consultations. He has authored thought-provoking articles, developed industry benchmarks, and introduced innovative concepts.

Mr Mulvany received a standing ovation when he accepted the award at the GippsDairy Muster in Churchill on Wednesday.

He thanked his family, mentors and many industry organisations in his acceptance speech.

If you know of someone who has made a significant contribution to the dairy industry, consider nominating them for the 2025 award. More detail on the applications process will be announced in due course.

MEDIA RELEASE
Wednesday, 18 December 2024

The peak national representative body for the Australian dairy industry is concerned the Victorian Government’s move to merge the state’s dairy food safety regulator puts the multi-billion dollar industry at risk.

The proposed reforms – part of a broader strategy to halve the number of business regulators by 2030 – would consolidate Dairy Food Safety Victoria (DFSV) with PrimeSafe, Agriculture Victoria and some Department of Health functions.

The Australian Dairy Industry Council (ADIC) argues this move could threaten decades of specialised, trusted food safety oversight in Victoria underpinning the state’s production of 63 per cent of the national milk pool.

ADIC Chair Ben Bennett said DFSV was a self-funded, stand-alone, cost recovery organisation, that did not cost taxpayers, while delivering huge value to dairy farmers and processors across the state.

“Unlike other food regulators, DFSV licenses thousands of dairy farmers across the state as well as dairy food processors,” Mr Bennett said.

Mr Bennett said ADIC would seek clarification from the Victorian Government on how it sees value in consolidating DFSV with the other organisations.

“Importantly, we want to understand how the government intends to do this without putting industry quality control, compliance, and consumer food safety at risk,” he said.

“ADIC is also concerned that a prominent driver of innovation would be removed from the industry, with DFSV having developed respected initiatives like the Dairy RegTech project, which enhances efficiency and compliance across the sector.

“We’re also concerned DFSV’s respected approach of industry-specific consultation informing regulatory measures could be placed on the chopping block.

“We call on the government to recognise the irreplaceable value DFSV provides to the Victorian dairy industry, maintain its role as an independent regulator focused on dairy food safety, and ensure farmers and processors have meaningful opportunity to influence the proposed changes.”

ADIC urged the government to reconsider its approach and invites further discussions to address these concerns.

ADIC deputy chair John Williams said DFSV’s success stems from its deep understanding of the multi-billion dollar industry.

Without this specialised focus, ADIC Deputy Chair John Williams said the unique needs of dairy farmers and processors could be overlooked and ADIC feared this could lead to weakened confidence in the food safety system.

“Victoria’s dairy industry is built on a foundation of trust, safety and quality,” Mr Williams said.

“We cannot afford to jeopardise the standards that ensure Victorian dairy products are among the safest and most sought after in the world.”

Mr Bennett pointed out the proposal could lead to on-farm audits being conducted by inspectors unfamiliar with the nuances of dairy operations, creating uncertainty and inefficiencies for farmers and processors.

“The Victorian dairy industry deserves a regulatory body that understands its challenges and opportunities,” Mr Bennett said.

“We call on the Victorian Government to remove DFSV from the proposal and safeguard the innovative and effective frameworks it has established.”

The subject of Bovaer, a supplement that reduces methane emissions from cattle, has recently gained attention in Australian media.

Bovaer, a DSM Firmenich product, has been extensively researched internationally for more than a decade.

As of now, Bovaer has not been used on Australian dairy farms.

The supplement works by inhibiting a specific enzyme in a cow’s stomach, effectively reducing methane emissions. It is made from naturally occurring ingredients – nitrates present in grasses and alcohols naturally found in a cow’s rumen – and is broken down during the cow’s normal digestive process. The cows fully metabolise the product and it does not appear in milk or meat.

The Australian dairy industry operates under strict regulations to protect public health.

Australia’s dairy industry supports the development of technologies that help address carbon emissions whilst also maintaining Australia’s stringent standards for animal welfare and human safety.

The Australian dairy industry is deeply committed to sustainability and has made significant progress in reducing emissions, including a target to lower emissions intensity by 30% by 2030. The industry will continue to prioritise sustainability, food safety, and public health in every aspect of its operations, working towards a more sustainable future for all.

Bovaer has been approved for use in 68 countries, including by the European Food Safety Authority and for beef by the Canadian Food Inspection Agency. These regulatory bodies have deemed it safe for animals, their handlers, and consumers.

For media enquiries please call +61 3 9607 1399.

The dairy industry has welcomed Australia’s new bilateral trade agreement with the United Arab Emirates (UAE), with high hopes it’ll lead to an uptick in exports to the region.

Australia’s peak dairy industry representative body – the Australian Dairy Industry Council (ADIC) – supported the push for a trade agreement with the UAE.

“Today’s announcement by the Minister for Trade, Don Farrell, represents a strong opportunity in an important export market for Australian dairy,” ADIC Chair, Ben Bennett said.

“We congratulate Minister Farrell on the announcement, which we hope leads to improved market access for our product.

“We understand this agreement will mean more agreeable trading conditions between the two countries and look forward to seeing the detail on what that looks like for dairy.”

ADIC deputy chair, John Williams, said the UAE was Australia’s largest trade and investment partner in the Middle East.

“Through the Comprehensive Economic Partnership Agreement (CEPA), Australia gains an advantage in trade with the major players in the Gulf Cooperation Council (GCC) countries.

“The GCC countries collectively import approximately 900,000 tonnes of dairy product annually.

“As a combined market it’s one of the largest dairy import markets globally, roughly equivalent in size to large economies like the United Kingdom.”

“Australia is a relatively minor supplier of dairy products to the GCC region, though this has not always been the case. This agreement is bound to help Australian dairy’s competitiveness.”

ADIC looks forward to the agreement being signed next month and the real benefits this will create for the Australian dairy industry.

ADIC chair, Ben Bennett, presents the 2023 Pat Rowley Outstanding Service Award to Terry Richardson.

Former Australian Dairy Farmers (ADF) president and Warrnambool Cheese & Butter chair, Terry Richardson, has received the Australian Dairy Industry Council’s (ADIC) 2023 Pat Rowley Outstanding Service Award.

This prestigious accolade recognises Terry’s exceptional contributions and dedication to the dairy industry throughout his career.

Having moved from New Zealand to Australia in the early 2000s, Terry’s commitment to the dairy community spans four decades and two countries.

Terry became a member of the United Dairyfarmers of Victoria (UDV) Colac branch in 2004, before being appointed to the board of Warrnambool Cheese & Butter in 2007. He later joined the ADF board in 2011 and served as ADF president and ADIC chair from 2017 to 2021.

Current ADIC chair, Ben Bennett, presented the award to Terry at a function in Melbourne on Tuesday night. Ben said Terry spearheaded pivotal initiatives aimed at fostering innovation, sustainability, and prosperity within the industry.

“Terry was heavily involved in crafting the Australian Dairy Plan and was instrumental in overseeing the introduction of the Dairy Code of Conduct,” Ben said.

“With a passionate belief that the dairy industry holds an important place in Australian society, he has consistently gone above and beyond the call of duty to grow and promote dairy’s valuable contribution to Australian communities.”

ADIC deputy chair, John Williams, said Terry was a “true leader” and “statesman”.

“As ADIC chair, Terry never lost sight of the target and what was in the best interest of the whole industry,” John said.

“He could deal with a myriad of personalities and provide a selfless rationale and steady influence in the face of individual self-interests.

“It is for this reason Terry is a well-deserving recipient of the Pat Rowley award.”

Dairy leaders have welcomed recognition from federal Agriculture Minister Murray Watt on Friday (22 March) of the critical importance of the dairy industry’s contribution to Australia.

Speaking at the government-hosted National Dairy Symposium in Melbourne, Minister Watt highlighted the government’s commitment to supporting the $17 billion Australian dairy sector.

“Dairy is Australia’s third largest agricultural industry, and we will continue to do everything we can to support Australian dairy producers and processors, even when that means making tough decisions,” Minister Watt said, referencing the Government’s decision to walk away from the EU trade deal.

The symposium, which was a pledge by the Government at the last federal election, tackled issues facing the industry, including productivity and growth, and sustainability and climate.

ADIC Chair Ben Bennett said the industry was heartened by the Minister’s support. “Statistics show dairy is a product of choice for Australian consumers, and indeed for many international markets,” Mr Bennett said.

“Every one of the industry’s current challenges presents an opportunity and on Friday, our industry made an important step to working together to drive positive change,” Mr Bennett said.

“Now, following the symposium, it’s important that government and industry chart a path forward that ensures the resilience, viability, and prosperity of Australian dairy for generations to come.”

ADIC Deputy Chair John Williams said the Minister’s announcement to commit funds to Dairy Australia to conduct workshops to explore the productivity challenge was fantastic news for an industry that is crucial to the economy and regional communities.

“We truly believe there are strong opportunities for profitable growth in the Australian dairy processing sector, with a stable domestic market and growing global demand for high quality dairy products,” Mr Williams said.

“Our goal is to secure a strong, vibrant Australian dairy industry and to keep dairy manufacturing local and we’re committed to doing everything we can to make this happen.”

Dairy leaders say an agricultural industry advisory group must be established for the implementation of the Murray-Darling Basin (MDB) Plan to ensure the livelihood of dairy farmers, processors and communities.

Australian Dairy Industry Council Chair Rick Gladigau and Deputy Chair John Williams met with the Federal Minister for Environment and Water Tanya Plibersek in Canberra yesterday, on the same day the Federal Government got the Senate support it needed to pass the Restoring our Rivers Bill.

“We expressed our significant concerns to the Minister about the Bill and the risks it poses to our industry, our farmers, and our regional communities,” Mr Gladigau said. “All at a time when milk production is at an industry 30-year low.

“We also sought details on the new amendments to the Bill that were passed and made it clear that the government must now genuinely engage with dairy farmers, processors and communities to ensure they are not destroyed in this process.”

The Bill passed the Senate with minor amendments that included a consideration of socio-economic impacts and options to lease water for the environment.

“We proposed to the Minister establishing an agricultural industry advisory group so that government genuinely engages with industry in the implementation and roll out of the new legislation.

“The group would endeavour to minimise negative impacts of buybacks by ensuring ongoing government accountability including the consideration and reporting of socio-economic impacts. Also, by ensuring that “all options are on the table” as the Minister has said, not only buybacks and to provide input into these options. Further, to provide input into the inevitable community assistance packages that will be required from structural change as a result of buybacks.”

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.

Mr Gladigau said since the introduction of the MDB Plan in 2012, dairy farm numbers in the region had fallen by 47 per cent and raw milk production dropped by 35 per cent.

Mr Williams said: “It’s so important we have an industry advisory group to consider the application of socio-economic considerations, the workings of community assistance packages and alternative measures to buybacks.

“Every day, dairy processors are fighting to ensure the continuation of the decline in milk production does not continue.

“Dairy processors are feeling the pressure to remain profitable, to maintain jobs for workers and keep the doors open,” he said. “Many are at breaking point and unsound water reform could be the final push.

“To put it simply, less water means less milk production. Less milk production means less processing. Less processing means less jobs and less Australian dairy products. All this increases food costs at a time when consumers are struggling through significant inflationary pressures.”

“We understand and support the need to provide water for the environment, we must also protect the livelihoods of local communities, the dairy industry and our processors.”

While in Canberra, Mr Gladigau and Mr Williams, accompanied by Australian Dairy Products Federation Executive Director Janine Waller and Australian Dairy Farmers CEO Stephen Sheridan, also met with Assistant Minister for Manufacturing Tim Ayres, Shadow Minister for Water Perin Davey and the Prime Minister’s office.

Australia’s dairy industry has backed Trade Minister Don Farrell in walking away from a trade deal with the European Union (EU) that would have hurt the Australian dairy industry.

Australian Dairy Industry Council (ADIC) chair Rick Gladigau and deputy chair John Williams are in Osaka, Japan, representing dairy’s interests during the talks.

Mr Gladigau said the industry has consistently reinforced that a free trade agreement (FTA) with the EU was never going to deliver a positive outcome for dairy.

“Australian dairy welcomes the Minister’s decision not to conclude a deal and walk away.

“Despite the best efforts of the Australian Government, the EU has continued to make unreasonable demands by insisting Australia adopt an anti-competitive Geographical Indications (GI) regime while at the same time resisting to provide equitable market access into the EU dairy market.”

Already, 70,000 tonnes of European dairy products are imported to Australia each year, compared to just 500 tonnes of Australian exports to the EU.

ADIC deputy chair John Williams said an FTA with the EU offered no gains for Aussie dairy, just costs and burdens. For dairy, no deal was better than an inequitable deal.

“We thank Minister Farrell for not blinking at the 11th hour and having the fortitude to walk away in the face of the EU maintaining its unreasonable position.

“This is especially important as the industry battles increasing cost of production, a flood of cheap imports and the lowest milk pool in 30 years.”

Says Mr Gladigau; “ADIC truly recognises the efforts made by the Minister and the negotiation teams at the Department of Foreign Affairs and Trade and Department of Agriculture, Fisheries and Forestry over the five years of negotiations.

“The complexities being faced by dairy in these negotiations have been well recognised as an enormous challenge and ADIC has appreciated the Government’s regular communication and consultation on the critical issues associated with the A-EUFTA.”

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Australia’s peak dairy advocacy body, the Australian Dairy Industry Council (ADIC), is calling for the Federal Environment and Water Minister Tanya Plibersek to drop her plan for water buybacks. ADIC is also inviting the Minister to visit the dairy industry in the Murray Darling Basin, especially in northern Victoria and southern NSW.

This week Minister Plibersek introduced to Federal Parliament changes to the Commonwealth Water Act and Basin Plan that would see water buybacks used to get the full 450GL of water for environmental flows delivered by a new deadline of June 2027.

ADIC Chair Rick Gladigau said he welcomed the much-needed extension but warned buybacks were not the answer. “No one cares more about the Murray River than the communities that live alongside it. But right now, they’re extremely angry and they’re extremely concerned.

“There are alternatives to buybacks and better ways to achieve environmental outcomes. Buybacks permanently remove the water from key food-producing regions, driving up the price of water and increasing the cost of food production and ultimately prices on supermarket shelves. This is the last thing we need when families are struggling to afford to put food on the table and the Government itself is running food security inquiries.

“It feels like the Minister is ignoring the alternatives to achieving positive environmental outcomes, and pursuing buybacks at the expense of rural communities and food production. This is a waste of taxpayer money.

“We encourage Minister Plibersek to visit dairy farmers, dairy processors and associated communities along the Murray River, especially in northern Victoria and southern NSW, and to hear firsthand the impacts this policy would have,” he said. “The dairy industry is calling for an innovative and outcomes-focused approach. Buybacks are a blunt instrument creating trauma for communities, leading to job losses and reduced investment.”

Mr Gladigau said the dairy industry in the Murray Darling Basin, contributed to the employment of almost 7000 people, directly and indirectly, across more than 900 farms and 40 dairy processors, with a farmgate value of over $1 billion. Unfortunately, since the Basin Plan began in 2012 farm numbers have fallen by 47% and milk production has dropped 35%.

“The Minister’s approach to drop the social and economic test has a very real impact on communities, jobs and food production, and effectively throws aside the spirit of bipartisanship that has held for 11 years through other challenges. What we have now is more stress, uncertainty, and frustration for communities in the Basin.”

Mr Gladigau said the industry had provided a range of other options around water efficiency projects to progress recovery. “There’s no easy answer to our water challenges, but just pushing through the first option to hand isn’t going to solve anything.”

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Media contact: To arrange interviews or for more information please contact Fiona Davis at fiona@curriecommunications.com.au or on 0434 505 188.

The Australian dairy industry has welcomed today’s news that talks on the country’s free trade deal with the European Union (EU) have stalled, sending a blunt message “no deal is better than a bad deal”.

Australian Dairy Industry Council chair, Rick Gladigau, thanked Australia’s Trade Minister, Don Farrell, for holding the line and not accepting an inferior agreement without genuine market access concessions from the EU.

“We’re fully supportive of Minister Farrell’s work,” Mr Gladigau said.

Throughout the negotiations, the European Union has sought to impose geographical indications (GIs) on Australian dairy manufacturers. If introduced, this would block Australian companies from using product names such as feta and parmesan. Such a move is expected to result in lost sales, which could cost the industry up to $95 million per year.

“The GIs claim is really just a way of facilitating greater access to the Australian market for subsidised EU product, while stifling genuine competition for Australian products. The claim would also impact the sales, profitability and productivity of Australian dairy businesses. GI’s also hamper the ability of new Australian entrants to the market and goes against the Australian dairy industry’s support of free and fair trade.

“The dairy industry thanks Minister Farrell, along with Agriculture Minister, Murray Watt and the Department of Foreign Affairs and Trade negotiators for their genuine engagement and support to date and looks forward to continuing to work with them.”

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Click here to watch Rick Gladigau explain dairy’s position on ABC News Breakfast.

The Australian Dairy Industry Council (ADIC) acknowledges, with sadness, the passing of former industry champion Michael (Mike) Taylor AO over the weekend.

Mike worked for ADIC from the late 1980s and served as its chief executive officer from 1990 to 1992.

He steered the industry through both the “Kerin plan” and the subsequent “Crean plan”, which were early steps towards deregulation.

Mike returned to the industry as chair of the Gardiner Foundation from 2010 to 2015.

ADIC chair Rick Gladigau said Mike brought invaluable experience to the dairy industry from his time working as a senior public servant. Mike held senior roles in the Victorian Department of Agriculture and Department of Natural Resources and Environment. He also served as secretary of the Commonwealth Department of Agriculture, Fisheries and Forestry.

More recently, Mike was chair of the Murray-Darling Basin Authority Board.

“Mike was a long-time stalwart and friend of the Australian dairy industry, and his knowledge and guidance will be missed by all,” Mr Gladigau said.

“Mike’s experience and ability to transcend the public and private sectors was highly valued by those who worked with him at ADIC.

“Our sympathies go out to his family.”

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Media contact:
Mark Paterson, Currie, mark@curriecommunications.com.au +61 (0) 409 411 110.

About the Australian Dairy Industry Council
The Australian Dairy Industry Council (ADIC) is the dairy industry’s peak policy body. The ADIC co-ordinates industry’s policy and represents all sectors of the industry on national and international issues through its two constituent bodies, Australian Dairy Farmers Ltd (ADF) and the Australian Dairy Products Federation (ADPF). It aims to foster, promote and protect the interests of the Australian dairy industry by driving a whole of industry approach to dairy policy and the development of the dairy industry.