As an industry we need to focus on having profitable robust dairy farms that can withstand volatile market and seasonal conditions. This may mean that some people in the industry need to change farming system or location. As an exporting industry free trade agreements are beneficial to us but we need to understand that we operate in a global environment and need a Cost of Production that reflects this.
We need to stop thinking that consumers should subsidise us having a higher cost of production than is possible. If we look over the ditch, in the low payout years NZ weren't asking for consumers to pay more for milk. Instead they took costs out of their business and improved their robustness. There are large parts of our industry that are rusted on and believe that society 'owes' them a living and a way of life. As a society we didn't take this approach with local corner stores - we all shop at the big supermarkets; as a dairy farmer I cannot see how the dairy industry should be seen any differently. We do not need regulated support, manipulated higher prices or government intervention.
The dairy industry is an amazing sector that can provide cashflow and returns that are rarely matched in other agricultural industries. We need to emphasise this and work to improve our returns by focussing more on our businesses and how we can improve - even if this does mean that we can't do things we used to - ET work, breeding stud cattle, showing cows, having 4 tractors or employing 1 person per 50 cows. Instead we must move with the times and work as an industry to put ourselves in the best position possible.
DA is a fantastic organisation that has some drawbacks but generally provides resources and learning opportunities that if better utilised would make us all better farmers, employers and business managers.
Looking at NZ
Population = Victoria.
Land area - about the same as Victoria.
They have the second largest dairy company - by volume in the world.
Australia does not have one in the top 20
They have universities that focus on dairy farming and processing - Australia does NOT
Fonterra can process up to 90% of the countries milk.
(the same for ARLA in Denmark )
Australia must have competition within the states.
While the NZ culture is similar, their rules are different and give advantages past the farm gate. This gives them a price advantage on the world market.
Their (NZ) system also supports the development of competitor processors like - Miraka, Open Country Cheese, Synlait and more.
We should look at their system and see what could be introduced in Australia. It may be difficult to put the genie back in the bottle, but having strategic training systems and a focus on regional and national food security will be important in the future.
Importing food does not seem like a sensible option for such a small population as Australia has.
Last year Australia IMPORTED 300,000 tonnes of dairy product - Ask DA - they have the figures. Yes, we exported too, but no one looks at the balance. By mass or value. We only praise the exports.
Australia needs to look at the future needs of the nation and recognise that
- we are consuming more than 20 years ago - our population has grown 27%
- - we are importing more , much more
- our farmers are leaving in droves
- we have no national measure of farm margin - as the USA has!!
- our milk production is dropping !
We are not looking at the nations needs, but repeating rhetoric of the past.
The silent hand of the market won’t fix this problem - in my opinion.
James has nailed it.....but one ought keep in mind the tragic dirty tricks of the two big processors a few years back that left many in a dire state. Of course with the Saputo purchase of MG, relief was given to the debts many of their suppliers had taken on to cover for it but the other company snubbed it's nose at it's obligation so has become the pariah of the processors and this has set up the "dog eat dog" mentality so trust will never be there again. This genie is well and truly out of the bottle.
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