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Moving in the right direction

Over the past two weeks we have seen an 11 per cent rise in global dairy prices.
This has been the highest since July 2014. Historically low for much of 2016, prices have finally started to increase. It is a really positive sign
that things are looking up for us.

As an industry we have been under intense pressure and with that intense scrutiny. The events of this year has given ADF the opportunity to really cement
our working relationships with state members – QDO, NSWFarmers, SADA, TFGA, UDV, WAFarmers, and industry partners such as Dairy Australia and Australian Dairy Products Federation.

Continuing to work together will give us the know-how and resilience to support dairy farmers to overcome adversity and thrive in the long term. These
things will only happen if there is buy-in from industry and a willingness from key stakeholders to hear each other out to develop solutions together.

The industry wide proposed code of practice on contractual arrangements with farmers is an ideal starting point to get things moving in the right direction.
It has been a long process and a major breakthrough for the entire industry to ensure future milk supply agreements are balanced, fair and transparent.
ADF is expecting to have a near final document by the end of November.

As you may be aware Dairy Australia has just released their forecast for full-year, national milk production for this season.

The current projections indicate that national milk production is down by 6-8 per cent for the 2016/17. However, these projections are in direct response
to the extraordinary period the industry has gone through given the low farmgate milk prices, tight margins and extremely wet conditions across southeast
Australia.

The last five months of wet weather has been challenging for many farmers. Yet, there are some really positive outcomes. Pasture growth will keep production
costs down well into December. Many dairy farmers can reduce the cost of production by saving on surplus feed and water prices in Northern Victoria
will remain under $100 per megalitre well into 2017.

While dairy farmers are still managing the here and now, our attention is firmly on the future sustainability and profitability of the dairy industry.
ADF is working towards addressing volatility to safeguard the future of our industry.

David Basham

Acting ADF President

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