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How much change is required to get the dairy industry to a 'better place'? Minor tweaking? Major transformation?
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6 months ago
Price, weather and management are the three key determinants of agriculture returns. Unfortunately the spread between high and low performing farm returns is still dominated by management differences as shown by ADI research with ROE varying from near 0% to 8-10%. Until greater improvements in management occur the industry will not achieve the goal of better financial stability for more farmers.
The entire industry and all its bodies need a total restructure. The duplication, corruption and top heaviness is unsustainable and not supporting our farmers. It may serve the ‘industry’ if the industry is multinationals and corporate owned farms which will ultimately destroy our communities and destroy the product the public want. Dairy Australia should be ashamed their direction is not the direction any farmer under 1000 cows is interested in. We vehemently oppose compulsory levies to a crowd serving themselves
Major change is needed, the processors and supermarkets have the majority of the power at the moment and it’s sending farmers to the wall. Farmers need to have a fair slice of the pie and as a young farmer (sub 30) there is no way young ones want into an industry where its very easily visible that at the current point in time the farmers are struggling and don’t receive a fair price for their product. The power has to shift fast or younger ones like myself will be out the backdoor and will have to the door shut on their dreams and it’ll be left to the big corporates but that’s probably what t...
5 months ago
Get the dairy industry to a better place? Easy answer: more profit for dairy farmers. More profit DOES NOT mean more production. It requires managing costs and trying to maintain revenues.
What change is required? Easy answer: Identify strengths and weaknesses and change the weaknesses.
Strengths: quality, price and, so far, supply => thanks to farmers and ,yes even, processors.
Weaknesses: low/unreliable return to farmers, difficulty to long term plan, ageing farmer base => due to poor market structures and supporting free markets instead of free enterprise.
A better place requires gre...
Structural change is required.
1. DA seems focused on high productivity “ fill the factories” resulting in high levies for DA to spend. The focus should have been on highly profitable robust farm systems that are capable of withstanding the fluctuations in markets.
Start with Dairy Australia’s bureaucracy by focusing it on the farmers. Move it from South Melbourne to Shepparton, or Warragul. Save a stack on rent as well.
2. RD&E funding structure has railroaded by NRM and Universities. The requirement of boards to “ optimize value” has allowed vested groups to lever a disp...
Create a framework of self regulation that engages all stakeholders in dairy, modeled on Canadian framework
Removal of current levy collection system. Replace it with a voluntary investment programme. And like all investments a clear return and value published annually.
We the Producer need individual choice of where we invest and how much we invest.
Me personally would invest nothing in Dairy Plan. Where I would invest heavily in Dairy Bio
Major transformation is needed ASAP. Our industry bodies have been told and told for years and years and wouldn’t admit there was a problem. I was told last year by a board member from ADF that you should be able to make money at $5kg ms. This shows the arrogance and ignorance of people in these roles! The whole industry needs a more simple structure and as an industry we need leadership. I am yet to see someone with leadership to give me hope there is a future of dairying going forward.
This article discusses the formation of Fonterra and the good and bad points.
We can learn a lot from this even though the number of Cooperatives left in Australia is small.
I also wonder if the structure of Cooperatives could be changed to a two tiered governance system like our parliament - so there are secondary checks ?
Thank you Keith for great insights as to how NZ. Is developing.
4 months ago
Like many others I saw and heard comments, 26.6 on ABC about the State of the Industry. Closing of the Fonterra Plant was featured and story related to workers in the Plant, the Plant Owner, and ultimately comments from farmers, new Chairman and a serious comment predicting "failure" for the industry, reliance on imports and dissatisfaction with the Industry Organization generally. Situation Analysis "Snapshot" on internet also highlights problems. Law suits, Class Actions, Unprofitable Operations, Unfair Market "Players", and almost "unbelievable" contracting met...
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