QDO off to Canberra & QDO Council Report

Eric Danzi, QDO Executive Officer

Eric Danzi, QDO Executive Officer

This QDO council met a few weeks ago to discuss and progress a number of important issues for Queensland dairy farmers. This meeting was used to frame QDO’s position as it heads to Canberra next week to lobby parliamentarians on key issues affecting the Queensland dairy industry. Issues discussed included the federal senate inquiry, the ‘Effects Test’ and the ACCC investigation. Other issues discussed at council included the Fair Milk Logo Bill, the QDO government relations plan,  ticks and membership of Australian Dairy Farmers (ADF).

The national senate inquiry, ACCC review and ‘Effects Test’ were discussed at length by the QDO council. It was noted that the effects test had been recommended by the senate committee and could go into the house at any time during sitting weeks over the coming months. The ACCC is still holding regional meetings across Australia after the first meeting was held in Toowoomba with over 100 Queensland farmers in attendance.

Mike Smith and Stephen Robertson from Ethical Consulting, a specialist government relations company, have prepared a detailed government relations plan for QDO. The plan is very comprehensive and professional, targets both state and federal members and focuses on the key issues facing QDO including the Fair Milk Logo Bill and three federal inquiries/bills already mentioned. The key issues facing QDO will be comprehensively lobbied to key government stakeholders under the plan. Implementing this plan will start in earnest next week when the QDO President, QDO Executive Officer and Stephen Robertson travel to Canberra to meet with over 10 key people from all sides of politics.

As QDO is a member of ADF, Terry Richardson, acting ADF president, attended council to discuss where the organisation was heading under his leadership. Terry spoke of his plan to move ADF forward by working closer with QDO in the future. The QDO council members appreciated Terry attending the meeting and giving councilors an insight the future of ADF and the industry at a national level. It was clear to all QDO councillors that there is great value for QDO working closely with ADF and Terry.

QDO councillor from North Queensland James Geraghty has nominated for the vacancy on the ADF board. All QDO councillors support James and it would be of great value to all dairy farmers in Queensland if James was successful in his quest to be on the ADF board.

QDO President Brian Tessmann briefed the council on recent activities relating to the Fair Milk Logo Bill including the meeting of the agriculture parliamentary committee in February. The bill is likely to be debated in Parliament in the coming months. QDO has been very active in supporting the Fair Milk Logo Bill and expect that all sides of politics will support Queensland dairy farmers by passing this bill.

Malcolm Macleod attended the council meeting and gave a very comprehensive briefing on issues related to the new tick line and management for ticks. It was clear that a lot had changed with regards to tick management and that QDO members would benefit from an update re ticks from QDAF. QDO has obtained a list of accredited certifiers for ticks in Queensland which is available HERE. We have also developed an information paper on the issue of ticks. This will be sent around in next edition of the Weekly Update.

QDO will be inviting QDAF staff with expertise in tick management to attend future QDO member meetings to discuss with members the latest in tick management.

Dairy farmers and processors need to work with not against each other

By Brian Tessmann, QDO President

The Queensland Dairyfarmers’ Organisation (QDO), alongside the entire dairy industry, were surprised and disappointed with Parmalat Australia’s unprecedented attack on Queensland’s dairy farmers by labelling the farm sector “unwilling to make itself competitive”.

Unfortunately, the cost of milk production rises the closer you are to the equator. The warmer climate, lower quality tropical pastures and fodder all contribute to an overall higher cost of milk production. In addition, processors in Queensland require constant year round milk production to ensure shelves can be stocked 365 days per year.

The lower production costs in southern Australia stem from the cooler climate and the seasonal spring production system that relies on the availability of temperate pasture. Queensland farmers are currently involved in the same dairying improvement programmes including those made with animal genetics.

Since 2011, times have been tough for both processors and farmers’ alike. Both farmers and processors have shared in the pain caused by the introduction of $1 per litre milk. At that time Parmalat was forcedto implement a 3 cents per litre drop on the price it paid its suppliers.

QDO is committed to seeing all milk sold in Australia sold for a sustainable price that equally benefits both farmers and processors and ensures a fair rate of return for the industry as a whole.

It is indeed strange that the Fair Milk Logo bill would evoke such concern from Parmalat. The logo wouldexist solely as a voluntary consumer information tool, not in any way resembling a compulsory ‘quasi regulatory’ system. The Fair Milk Logo simply empowers consumers to identify and hopefully support local fresh milk products or processors that pay a sustainable price to Queensland dairy farms. QDO continues to work with Parmalat and all processors to improve the sustainability of Queensland milk production to ensure all sectors of the supply chain improve the viability and longevity of the state’s dairy industry. The Fair Milk Logo simply builds upon this this commitment and will in the long term deliver for consumers, retailers, processor and farmers.

Drought relief assistance packages for dairy farmers

Regions of Queensland drought declared

Regions of Queensland drought declared

With over 70% of Qld being drought declared, the Banana, Bundaberg, Cherbourg Aboriginal, Fraser Coast, Gympie, North and South Burnett and Somerset regions have now been drought-declared. This means that dairy farmers can claim a range of benefits from the government which may be included in the drought-relief assistance schemes. (e.g. for electricity charges, water fees, land rent rebates, land rent deferrals, transport-related measures and concessional loans scheme.

Drought Relief Assistance Scheme (DRAS)

The DRAS provides assistance to drought-declared properties including:

  • transport of fodder freight subsidy
  • transport of water freight subsidy
  • Emergency Water Infrastructure Rebate (EWIR), which provides a rebate on the purchase and installation of water infrastructure purchased for animal welfare needs.
  • Drought management plan
  • Individually droughted property

As well, properties that have had their drought declaration revoked may be eligible for freight subsidies for transporting livestock returning from assignment or purchased for restocking.

DRAS generally provides a maximum of $20,000 per property per financial year on all freight subsidy and rebate types but this can increase incrementally up to $40,000 as drought continues.

Producers in a drought-declared area or who have an individually drought-affected property (IDP) declaration can apply for DRAS support through DAF. Further information can be found HERE.

Drought relief from electricity charges rebate scheme (DRECS)
The Department of Energy and Water Supply operates the DRECS for customers in Energex areas and non-Ergon Retail customers in regional areas. The scheme provides relief from fixed charges for accounts that use electricity to pump water for farm or irrigation purposes during periods of very low or no water availability. If you are an Ergon Energy customer seeking relief from electricity charges, please call 13 10 46 or email: customerservice@ergon.com.au

Water fee relief
Annual water licence fees from 1 July 2016 until 30 June 2017 will be waived for Queensland producers in drought-declared areas from the date of their drought declaration. Affected landholders will be advised by the Department of Natural Resources and Mines of the waiver by letter.

Drought assistance land rent rebate
Holders of rural leases (Category 11 leases used for grazing and primary production) issued under the Land  Act 1994 are eligible for a rebate of 12% of their annual rent where that annual rent is more than the minimum rent of $235. The rebate is available for leases that are in drought-declared areas and for those that have an IDP. Landholders who are eligible for the rebate will receive information with their annual/quarterly invoices.

Transport-related drought assistance measures
Drought assistance measures provided by the Department of Transport and Main Roads include:

  • permits for increasing the maximum hay loading height
  • concessions on shifting droughted livestock
  • waivers and greater flexibility on certain vehicle registration conditions and fees and charges
  • increased school transport allowances for some families that drive their children to school or connect with a school bus run

Drought Concessional Loans Scheme

  • Drought Concessional Loans to assist farm businesses to manage, recover from and prepare for droughts are available at a variable interest rate of 2.47 from 1 February 2017. It can be used to restructure debt and/or provide new debt for operating expenses, drought preparedness activities or drought recovery activities. Information on the Drought Assistance Concessional Loans is available HERE. If you have any queries regarding drought specific schemes for Queensland please call: 1800 623 946
  • Loan amounts can be up to 50% of a farm business’ final debt position to a maximum of $1 million. Maximum loan terms of up to ten years apply, with interest only repayments initially available for up to five years. The scheme will close to applications on 30 June 2017 or earlier if funds are spent.
  • Detailed eligibility criteria are available in the scheme Guidelines HERE. A Drought Management Plan is available in the scheme's Application Form HERE.
  • You must submit a valid Bureau of Meteorology 'Rainfall Deficiency Report'. This shows whether your farm business is located in an area that has experienced a rainfall deficiency equivalent to, or worse than, a 1 in 20 year rainfall event. A Rainfall Deficiency Report that shows your property is located outside an area that has experienced a rainfall deficiency equivalent to, or worse than, a 1 in 20 year rainfall event does not necessarily mean that you are ineligible for assistance.

A Rainfall Deficiency Report can be obtained using the Bureau of Meteorology's Australian Rainfall Deficiency Analyser. To generate a report:

  • Locate your farm business by using the (+) or (-) buttons to zoom in or out on the website: Australian Rainfall Deficiency Analyser.
  • To ensure the necessary accuracy in obtaining a valid Rainfall Deficiency Report, continue using the zoom function until you have positively identified the location of your property. To avoid selecting a neighbouring property in error, make your selection well within your property boundaries. An incorrect report will cause delays in processing your application.
  • Once you have accurately located your farm business, click your mouse and an option to download a Rainfall Deficiency Report becomes available. Click on (download report), and then print the Rainfall Deficiency Report and attach it to your loan application.
  • Alternatively, you may enter the individual latitude and longitude co-ordinates of your farm business location (if known).

Your Rainfall Deficiency Report will be valid for 60 days and forms part of your loan application. If you are unable to lodge your application within 60 days you need to obtain a new report. The Australian Rainfall Deficiency Analyser is updated on the 23rd of each month (or next business day). When assessing applications, QRAA will verify information provided by applicants.

QDO will mail all members in drought declared areas a drought relief assistance pack in the next week.

If you need further assistance please call the QDO office on (07) 3236 2955.

Prices up, wolume down in South

By Brian Tessmann, QDO President

While Queensland dairy farmers continue to worry about price drops in the local milk market, the call for supply to meet demand in southern Australia is very much on the rise.

Although the export focused market is coming off a low base following last year’s price drops with Murray Goulburn, the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report indicates that milk prices in southern Australia are now rising by about 2% and are forecast to rise by another 7% in 2017/18.

These forecasts suggest that milk prices in the region will be headed back to attractive levels as early as 2020.

Meanwhile, milk production in Victoria has collapsed with a fall of 7.2% in January contributing to a year to date (YTD) drop of 9.5%. The drop was particularly severe in Northern Victoria where there was a drop of 17.2% for January and a YTD drop of 17.5%. By the end of the year, the drop could accumulate to include over 350 million litres.

The production drops did not stop at the Murray River either with southern New South Wales dropping a YTD total of 9.7% and 11.4% in January leading to a collective drop of 8.4% across the state for the month. This is predicated to encompass a total reduction of over 70 million litres.

In the past, most autumn periods in New South Wales and Queensland combined did not produce enough to supply their combined domestic demand. On top of this, southern NSW is committed to extracting a significant volume of milk for manufacturers at that time of year.

The southern shortage came into focus last week with United Dairyfarmers of Victoria (UDV) blasted the supermarkets for sourcing cheap international cheese for their stores’ brand after Australian product became no longer available.

Surely then, any northern processor looking to source milk from a weakening southern dairy industry would need the senses of a bloodhound to find any spare milk without a good home. Even them they would need a full wallet to boot.  

‘Effects test’ reviewd & accepted by Sentate Committee

The Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 or better known as the ‘Effects test’ Bill has reviewed and approved by the Senate Economics Legislation Committee. The committee report has been released recommending that the bill be passed by the House of Representatives and Senate.

This is another important step in what has been a long journey to get the ‘effects test’ into law. The next step will be passing the legislation through both parliamentary houses. QDO has been lobbied for an ‘effects test’ to be introduced and will continue to do so during the crucial next few months.

An ‘effects teat’ is a major component of ensuring the dairy industry can operate in a fairer market that ensures there are not abuses of retailer’s power. If passed the new laws will deliver a balanced playing field where the powers of the supermarkets to dictate the price of products like dairy will be reduced.

Milk Mark gets another Tick

By Brian Tessmann, QDO President

It’s time for voters to call on their state MPs to take decisive action on giving dairy consumers clearer and simpler choice on which milk they put they should put in their shopping trolley to support Queensland farmers.

Last Wednesday (1/3/17) I once again represented QDO in presenting our case to the Queensland Parliamentary Agriculture and Environment Committee, this time speaking in favour of the proposed ‘Fair Milk Price Logo’. The committee also heard from the Australian Competition and Consumer Commission (ACCC), the Department of Agriculture and Fisheries (DAF) and local government. 

The bill is based on a voluntary system and designed to give milk consumers reliable information to assist in their milk purchasing decisions. The ‘Fair Milk Price Logo’ can go on bottles as long as the requirements that the milk has been sourced in Queensland at a recognised sustainable price have been satisfied.

Some processors have indicated that they would not participate as they cannot identify milk from outside Queensland in their system. There have however been some recent notable examples of brands playing off the back of Queensland produced milk. 

It was disappointing to see a processors such as Parmalat make a submission opposing the Bill. Its submission describes the ‘Fair Milk Price Logo’ bill as ‘quasi re regulation’ and infers that Queensland dairy farmers have shown ‘no interest in being nationally or internationally competitive’. The submission also questions the future for dairy farming in Queensland by drawing comparisons to its viability as growing bananas in Victoria. I urge all Queensland dairy farmers to read the submissions to the committee to see the regard some processors have for them and our state’s industry.  

Most presenters at the committee gave either cautious or enthusiastic support for the bill. In fact, representatives from the ACCC said while they had not studied the bill they understood it was about giving better consumer information on how the product was sourced, a concept in principle they supported. Put simply, this bill empowers consumers to support local fresh Queensland milk. It gives consumers a clear choice of supporting a local and successful dairy industry that employs and supports Queenslanders.

QCA prices increases between 1.7 – 5.2%

This is substantially less than previous years when increases were over 11%. Increases will be under 2%. 

The Queensland Competition Authority has released its draft decision on regulated retail electricity prices for regional Queensland in 2017-18.

This year’s draft decision forecasts increases across irrigation and rural tariffs 1.7 – 5.2%..

Prices are set in accordance with the Queensland Government's uniform tariff policy, which means most regional customers pay significantly less for electricity than it costs to supply.

Feedback is welcome through the submission process open until April 3, 2017. More information on how to make a submission is available on our website.

The final decision will be published by May 31 with the prices to apply from 1 July 2017. The regulated prices are only available to customers in the Ergon distribution region as retail electricity prices in south east Queensland have been deregulated from 1 July 2016.

For more information click HERE.

Central Queensland State Councillor Report: Aaron Clews

ROSSMOYA DAIRY FARMER AARON CLEWS

ROSSMOYA DAIRY FARMER AARON CLEWS

The season has been tough on Queensland’s dairy farmers who are yet to receive a decent summer rain. With broadcasts of a similarly dry winter, there is concern the lack of rainfall could lead to inconsistent milk production.

Following an uncharacteristically dry summer, QDO State Councillor for Central Queensland Aaron Clews said local dairy farmers share the same concerns of those in the broader industry with fear of drought and apprehension over falling milk prices.

“We are getting hot under the collar with a lack of summer rain and ongoing Parmalat contract negotiations,” he said.

Mr Clews sentiments reflect that of the majority of dairy farmers who are frustrated by market failures and farm gate costs. The uncertainty of ongoing price negotiations continues to be at the forefront of their minds.

As a third-generation dairy farmer in his thirties, Aaron Clews is the youngest representative on the QDO State Council. He and his brother Michael milk more than 300 cows on their property in Rossmoya, 45 kilometres north of Rockhampton. In mid-2013 he became the QDO State Councillor for Central Queensland, representing more than 28 working dairy farmers in the central region.

“Working with QDO has made my network bigger and opened my eyes to the needs of local dairy farmers,” Mr Clews said.

Despite the recent difficulties in the region, Mr Cluse remains positive about his future in the industry.

“Along as there is a local demand for our milk and the farmgate prices remains sustainable I can see a bright future our business,”

“I encourage younger dairy farmers to get involved and make their voices heard. The first step to making positive change in your industry is putting your hand up. It is so important as younger farmers to be the change you want to see in your industry,” he said.

“It’s easy to sit back and do complain about the way things are headed, but it’s more helpful to step up and make a difference.”

International Dairy Prices Heading Upwards

By Brian Tessmann, QDO President

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The findings of Dairy Australia’s latest Situation and Outlook (S&O) Report paints a picture of a domestic industry struggling while there’s a recovery underway in the international export focused sector.

Last Wednesday Dairy Australia’s John Droppert presented the S&O findings to the Australian Dairy Industry Council (ADIC) workshop in Melbourne. The main takeaway was that Australian industry had endured a ‘full cream milk’ crisis that had now entered recovery in recent months.

Global

·         Global dairy supply and demand balance is better than it has been for some time and prices for most products are now above five year average levels. While the Russian sanctions issue had not been resolved, there remains hope in the market that Donald Trump would soon bring Russia and its demand for dairy back into the fold.

·         The ongoing situation in European meant countries like Holland that were expanding rapidly two years ago now need to reduce production to conform with European Union (EU) rules.

·         Dairy fat with butter and other fat products continue to be the hot items with significant growth in value.

Australia

·         Australian production looks to be down by around 9% this year to as low as 8.8 Billion litres.

·         Gains made from the sales of branded products last year through the ‘I buy branded milk’ campaign continue to hold reasonably well above averages seen prior to the campaign, however there has been some drop off.

·         Cheap or dumped low quality dairy products landing on our supermarket shelves will be a threat to local product

Dairy Australia’s S&O noted that while the world market is looking up there is still pressure on prices for farmers supplying the domestic market. So while market forces may be improving international prices, the domestic market clearly requires our governments to help facilitate a fair framework that repairs the blatant imbalances that become so glaringly obvious to everyone during the dairy crisis.

Electricity charges increase 324%

By Ross McInnes, QDO Vice-President

If a dairy farmer wanted to increase their return on investment, considering that their income cannot increase due the fixed nature of supply contracts, one creative way would be to devalue the farm assets to make the imaginary returns look better.

If the electricity industry wanted to make more money, but the regulator set the rate of return, the creative way to achieve this would be to inflate your asset value so in turn higher rates can be charged for maintenance. This is the kind of creativity Queensland’s electricity sector has been thriving on for some time now.

This has resulted in unmanageable increases in electricity charges for rural industries year after year that appear not to have any no end.

Consecutive Queensland Governments squeezed unsustainable performance dividends from the electricity industry. This resulted in a substantial long term underinvestment in the electricity network requiring a surge in network charges to compensate for the overdue catch-up maintenance.

Because network charges began to form a larger proportion of the total cost, the Queensland Competition Authority (QCA) formed the view that off peak charges were suddenly being overly subsidised. For irrigators trying to minimise costs and increase water use efficiency, this resulted in the unsustainable increases seen over the past decade.

In December 2008 the off peak charge was 7.1 cents per KWh. The current charge is 23 cents per KWh– an increase of 324%. This level of increase regardless of the industry is totally unacceptable. A farmer operating one 30KW irrigation pump, 10 hours a night 5 nights a week on off peak power is paying $238 per week more than 2008 on that component of the bill alone. Minister Bailey needs to explain where we are heading with prices for the next decade.

More than a decade ago, then Premier Peter Beattie promised cheaper electricity by bringing in more competition. However, when prices spiked, the Premier’s excuse, reminiscent of a line from Animal Farm, was simply, “prices are cheaper than if we had done nothing”. Sadly, this same dismissive attitude still dominates the Government’s response to this crisis.