Dairy re-regulation in senators' spotlight.

NOT OUR BRIEF: Dairy Australia's chair Jeff Odgers says the big service provider does not have an advocacy role and therefore can not take a stand on the re-regulation debate.

THE value of dairy export markets should be a significant consideration in any discussion about setting a floor farmgate milk price, Dairy Australia's chair Jeff Odgers told a senate estimates hearing at Parliament House in Canberra yesterday.

The concept of re-regulating dairy was a hot topic during Dairy Australia's appearance at the Senate Rural and Regional Affairs and Transport Legislation Committee hearing.

Questioning led by Queensland senator Pauline Hanson centred on how best to deliver a fair and viable farmgate price that would stop the decline in both dairy farm and herd numbers.

Both Mr Odgers and DA's managing director David Nation said their organisation could not take a position on re-regulation because it was a research, development and marketing body and did not have an advocacy role.

Dr Nation also said DA had not been asked by its levy payers to conduct research on re-regulation.

However, when asked whether re-regulation was a prerequisite to achieving a fair farmgate price, or whether the industry might perhaps be "cutting off its nose to spite its face" if it took that path, Mr Odgers said the fact Australia exports 35 per cent of its milk production was an important factor to consider.

"We need to look to what happens in other industries that go down that pathway," Mr Odgers said.

"The industry, and country, as a whole has to balance what creates a stronger, more sustainable, more globally competitive industry in the long run and the export element is a significant part of that consideration."

Mr Odgers also provided explanation around what has become a controversial topic in dairy - the fact Australia imports large volumes of cheddar cheese from New Zealand.

"A total of 38pc of our milk goes into cheese and last year we produced 381,000 tonnes of cheese," he said.

"We exported 166,000t of that and at the same time, we imported 94t. About a third of that was cheddar."

Much of that cheddar services the affordable private label market segment. There was simply not a lot of margin in $6/kilogram private label cheddar, Mr Odgers said.

"Some processors choose to create products for overseas markets that can generate a higher margin," he said.

"We all love consuming Australian product but there are dynamics of trade at play and processors seek the best margins they can."

Senator Hanson reeled off disturbing figures about dairy's decline in Australia, arguing it was the result of farmgate prices below the cost of production.

"In Queensland we've dropped from 3052 dairy farms in 1979-80 to 380 today, we've seen a national drop of 21,994 to 5699 (in the same period) and we've dropped cattle numbers from 1.88m in 2005/06 down to 1.56m head today," she said.

Mr Odgers said the average size of dairy farms continues to grow and that was a global trend.

"It's true farmers in all jurisdictions are finding it challenging to be profitable," he said.

"To a fair degree that's down to feed base in the climate we are now operating in. I farm in northern Victoria, where there have been significant shifts in terms of access to water, how we produce feed and the farming systems we run.

"But there are also farmers in all jurisdictions generating earnings before interest and tax of of $1 to 1.50/kg milk solids."

Dr Nation said DA "absolutely saw the need for strong milk prices in order for farmers to have a positive operating margin."

"The Australian dairy industry produces more milk than required for domestic consumption," he said.

"Our challenge, like many agricultural commodities, is farmers are paid a price directly related to the global price for dairy.

"We operate in an open market which is highly informed by what companies are able to achieve by exporting product.

"But one of the absolute strengths of the Australian dairy industry is there has been a growing domestic premium over the global price. Processors have been successful in driving higher farmgate prices than what would be achievable just following the prevailing global market."

Source: FarmOnline Thursday 24 October: Shan Goodwin@shangoodwinbeef

Queensland Dairyfarmers' Organisation says it will use whatever means necessary to restore industry.

The plight of the Queensland dairy industry has been in the spotlight with One Nation leader Pauline Hanson and the state's advocacy body stepping up calls for urgent action.

A floor price has been proposed by the Queensland Dairyfarmers' Organisation, which said the RRP should be increased to $1.50 per litre.

"This would allow margins of around 35 cents to the retailer, 40 cents to processor and would give farmers 75 cents at the farm gate," a spokesperson said.

"This should give most Queensland dairy farmers a sustainable and fair farm gate price which covers the costs of production... a reasonable cost of living and a modest profit."

Mr Buchholz had earlier raised concerns about the possibility of a national floor price, saying it would not benefit Scenic Rim farmers.

"The National Farmer's Federation, the Queensland Dairy Organisation and the South Australians all know full well that a national floor price...would leave Victorian farmers rubbing their hands together with glee and Queensland farmers out in the cold," he said.

"Local dairy farmers tell me that the average cost of production in Queensland before the drought was 55 cents a litre and now it's in most cases in excess of 60 cents. In Victoria it is 40 cents. (A floor price) will separate the national industry into the highly profitable and those just scraping by."

He said processors needed to back an increase to the retail cost of milk and pass the profits to local farmers.

"(They) are the ones that deal with both retailers and farmers. They are the ones with the power to ensure farmers are paid more for their product," he said.

Former Labor leader Bill Shorten backed a milk floor price at the last election.

The QDO spokesperson said the organisation was open to investigating every viable avenue to restore the industry.

"If there is a possibility that regulation or a milk levy in supermarkets is viable, practical and most importantly will work, then we will support it," the spokesperson said.

"While we would like to do this the nice way by having sensible and rational negotiations with all parties, if we need to, we'll do it the hard way and use whatever means necessary to get it done."

Last Thursday, Ms Hanson won support for an investigation into the performance of Australia's dairy industry since de-regulation in 2000.

It would include a look into the merits of tasking the ACCC to investigate how it could regulate the price of milk to ensure a viable dairy industry.

The findings are expected to be reported in March 2020.

It came after Ms Hanson put an ultimatum to the federal government that One Nation would stop voting in support of non-critical government business until action was taken to support the industry.

 ACTION: An investigation will be conducted into the problems of the industry. Photo: AAP

Wright MP Scott Buchholz did not respond to questions about whether he supported Ms Hanson's actions - including an urgency motion put to parliament on Tuesday and voted down by the Liberal Party.

Ms Hanson said annual milk production in Australia was 12 billion litres in 2000, but had fallen to 8.8 billion.

She pushed for the introduction of a dairy industry code of conduct by the end of the year at the latest, six months before the government's proposed date of June 2020.

Mr Buchholz spoke in support of a code earlier this year, saying it would help to address the current power imbalance between dairy farmers and processors.

Ms Hanson also called for re-regulation of the industry, which would mean legislative control over what processors pay for milk.

Source: FarmOnline

Performance of Australia's dairy industry and the profitability of Australian dairy farmers since deregulation in 2000.

On 17 October 2019, the Senate referred the following matters to the Rural and Regional Affairs and Transport References Committee for inquiry and report by the third sitting day in March 2020:

The performance of Australia's dairy industry and the profitability of Australian dairy farmers since deregulation in 2000, with particular reference to: 

  1. the ability of Dairy Australia to act independently and support the best interests of both farmers and processors;

  2. the accuracy of statistical data collected by Dairy Australia and the Australian Bureau of Statistics;

  3. the funding of Dairy Australia and the extent of its consultation and engagement on the expenditure of levies revenue;

  4. the merits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry;

  5. alternative approaches to supporting a viable dairy sector;

  6. the introduction of a mandatory industry code of practice; and

  7. any related matters.

The committee invites you to make a submission addressing all or some of the issues identified in the above Terms of Reference. Please extend this invitation to any person or organisation that might also be interested in making a submission. The closing date for submissions to the inquiry is Friday, 29 November 2019.

The Committee encourages lodgement of submissions in electronic form. Submissions can be lodged via the Online Submission System. Submissions can also be sent by email to rrat.sen@aph.gov.au or by post to: 

Committee Secretary
Senate Rural and Regional Affairs and Transport References Committee
PO Box 6100
Parliament House
Canberra ACT 2600

Please note that submissions become committee documents and, absent a committee decision to the contrary, are published online. Persons making submissions must not release them without the committee's prior approval. Submissions are covered by parliamentary privilege but their unauthorised release is not.

Please ensure that any submissions or attachments you wish to remain confidential are clearly marked as such. A covering letter, clearly outlining the specific reasons for requesting confidentiality, should also be attached to the submission. Please contact the Secretariat if you require further advice on any issues with regard to confidentiality.

For further information about the inquiry see the inquiry homepage or phone (02) 6277 3511.

Queensland dairy farmers call for Coles, Woolworths to step up generic milk price.

Calls are growing for supermarkets to do more to support the dairy industry after a generic milk price rise.

Stubbornly low prices for generic milk need to rise immediately as drought pressures mount, Queensland dairy farmers say.

The Queensland Dairyfarmers Organisation were successful in their quest to end the era of dollar-a-litre milk earlier this year, with Coles, Aldi and Woolworths bumping up the generic price tag to $1.10 in February.

Coles and Woolworths announced the extra 10c would be passed directly to farmers, seven years after the dollar-a-litre scheme was introduced.

However, Aldi moved to rise the generic price to $1.20 a litre in July and was quickly followed by Coles and Woolworths. All three did not increase farmer aid as a result.

QDO president Brian Tessmann said dairy farmers nationwide welcomed price hikes to better reflect the true value of the product.

However, he said it angered many in the industry that supermarkets had changed their tune on both pricing and assistance to farmers.

“For years, Coles and to a lesser extent Woolworths, were adamant that generic milk needed to stay at a dollar-a-litre because that’s what the customer expected,” Mr Tessmann said.

“We’re now at $1.20, which is still very low, a lot lower than most bottled water on sale in supermarkets. We should be seeing it rise to at least $1.50 a litre and the benefits of that following through to farmers.”

While Queensland has been the epicentre of the dollar-a-litre anger, Victorian group Farmer Power has also called for the extra 10c to be passed on to producers.

At the time of the 2011 dollar-a-litre introduction, dairying groups noted that 1992 was the last time milk was sold at the $1 mark before the marketing move.

If milk rose at normal inflationary levels from 1992 to 2018, the price of generic milk would now be $1.89 a litre.

Mr Tessmann said the exodus of dairy farmers in the past two years had tightened up supply considerably.

“If market forces were being truly reflected, we would be seeing a sharp rise in the price of milk to reflect the dwindling supply,” he said.

A Coles spokeswoman said the supermarket had raised more than $16 million for farmers during the past 12 months.

“Coles continues to work towards making Australia’s dairy industry more sustainable and is exploring long-term solutions with government and industry stakeholders,” the spokeswoman said.

A Woolworths spokeswoman echoed its main rival and said the supermarket had made a substantial contribution to farmers through its 10c support initiative.

Aldi did not respond in time for deadline.

Source: ALEX SINNOTT, The Weekly Times 15 October 2019

Quad bikes: Rollbars made mandatory on all new ATVs

All new quad bikes must be fitted with rollover protection devices within two years.

OPERATOR protection devices must be fitted to all new quad bikes within two years, following the Federal Government’s decision to adopt the key recommendations of Australia’s consumer watchdog.

Federal Assistant Treasurer Michael Sukkar said in Melbourne today “this safety standard aims to address the high risk of rollovers, which is especially important for many of our farmers and their families who use these vehicles daily”.

“Importantly, these requirements will put the onus on foreign manufacturers to supply safer quad bikes into Australia, and protect Australian farmers and others who use them,” he said.

Within two years all new general use model (utility) quad bikes will be required to:

BE fitted with, or have integrated into the design an operator protection device (rollbar).

MEET minimum stability requirements.

Within the next 12 months all new quad bikes will be required to:

HAVE a warning label alerting riders to the risk of rollover.

MEET US or European standards (performance of components like brakes, suspension, throttle and clutch).

TEST for stability and display the result on a hang tag attached to the bike at point of sale.

Mr Sukkar’s announcement has meant the Federal Government had finally accepted the Australian Competition and Consumer Commission’s calls to fit OPDs, after almost two year’s of community consultation, delay and debate.

The ACCC first called for operator protection devices to be fitted to all new quad bikes in its final report into quad bike safety in February this year, after almost 18 months of deliberations, industry consultation and 119 submissions.

The Weekly Times has previously reported that Deputy Prime Minister Michael McCormack put pressure on the ACCC, before the May federal election, to abandon its OPD recommendation.

At the time Mr McCormack’s office said he had merely “consulted” with the then Assistant Treasurer Stuart Robert “on the issue of quad bike safety and the recent ACCC report”.

The ACCC resisted the pressure, but Mr Robert refused to adopt the consumer watchdog’s recommendations, referring the matter to another round of public consultation, which ended on June 10.

The new round of consultation offered the Japanese manufacturers Honda and Yamaha — who have threatened to withdraw from the Australian market — a last-ditch bid to stop mandatory OPDs.

A coalition of the nation’s leading farmer, medical and community groups demanded the Federal Government to stop stalling on adopting the consumer watchdog’s recommendation and require all new quad bikes to be fitted with OPDs.

The coalition, led by the National Farmers Federation, included the Rural Doctors Association of Australia, Royal Flying Doctor Service, National Rural Health Alliance, National Rural Women’s Coalition, Country Women’s Association of Australia, Australian Workers’ Union, National Centre for Farmer Health, AgForce, NSW Farmers, Victorian Farmers Federation, Primary Producers South Australia and WA Farmers.

In the end the ACCC delivered yet another report to the Federal Government in September, which reiterated its call for mandatory OPDs, leading to Mr Sukkar announcement today.

NFF cheif executive Tony Mahar said “today’s result is nothing short of life-saving”.

“Quad bike accidents have already claimed nine lives this year and 230 since 2011, about half from rollovers,” he said.

Mr Mahar acknowledged the Government, and in particular Mr Sukkar, for officially making the change, and thanked all MPs and senators who listened to the NFF’s concerns and put the safety of farmers first.

“We were also tremendously grateful to be supported in our call for reform by the leading voices of regional Australia and the medical fraternity,” he said.

“In the end, the weight of these voices could not be ignored.”

ACCC deputy chair Mick Keogh said developing the new safety standards had “not been an easy process”, but they gave manufacturers the opportunity and time to install and develop their own OPDs.

Mr Keogh said the ACCC’s recommendations were based on the simple fact that quad bikes were inherenty unstable.

Source: Weekly Times 10 October 2019

Michael Hampson appointed Chief Executive Officer.

I am pleased to announce that the Board of Norco has appointed its new Chief Executive Officer - Mr Michael Hampson who will take up the role effective Thursday 3rd October 2019.

Since commencing with Norco seven months ago in the role of Chief Operating Officer, Michael has worked closely with the Norco Foods’ division developing and executing our corporate strategy, overseeing the business operations and financial performance of the co-operative.

Chairman Greg McNamara said “Michael brings a wealth of experience gathered across the dairy and consumer goods industries, and has been an integral member of the executive team since joining early in March this year.”

“Michael has gathered the support of the Norco team and delivered positive change to the business since day one at Norco, and will now have the ability to lead our great co-operative as we head into our 125th anniversary year.”

In commenting about his appointment, Michael Hampson said “It is an absolute pleasure to lead the management team of Australia’s largest dairy co-operative, as we continue to take our quality milk products to consumers that value our quality products and the 100% farmer owned proposition.”

“Norco is a proud, growing business with a 125 year history of supporting farmers and the communities where we operate. The next chapter of the Norco story will see us continue to build on our strengths of supporting our farmers, providing exceptional career opportunities for our people, and continue to provide quality dairy products to our valued consumers across the world.”

Source: Norco Chairman Greg McNamara

Milk price announcement further underlines NORCO’s commitment to its dairy farmer members during the drought.

Norco has announced a drought support premium payment to Members / Milk Suppliers effective 1 October 2019 which will result in an average increase to the base milk price over the nine months to 30 June 2020 of five cents per litre.

This announcement is supported by the continued and detailed review of Norco’s performance year to date by the Directors and management team.

“The management team has, and continues to, deliver considerable improvements to the underlying profitability of the business as a result of the Business Activity Management Program being undertaken. These improvements are now providing a tangible benefit in the form of milk price to the owners of our proud Co-operative – the Members / Milk Suppliers,” Chairman Greg McNamara advised.

Norco’s newly appointed Chief Executive Officer Michael Hampson added “We continue to work on our business to ensure we can leverage support for our Members who are battling ongoing severe climatic conditions. It is very gratifying that our customers and consumers continue to recognise the value of supporting a 100% Australian farmer owned dairy co-operative and collectively we thank them for their great support.” 

Source: NORCO 3 October 2019

New online tool helps dairy farmers manage biosecurity risks.

Dairy farmers now have access to a new online tool to build their skills and adapt their management approach to biosecurity risks.

Developed as part of an industry collaboration between Dairy Australia and Agriculture Victoria, the biosecurity tool enables dairy farmers to create a biosecurity plan tailored to their farm, based on Dairy Australia's Healthy Farms Biosecurity Framework.

Dairy Australia technical and innovation manager Dr John Penry said it was important for all farms to have a biosecurity plan to manage disease risk.

"It's crucial for dairy farmers to maintain a biosecurity plan tailored to their herd and farming system," Dr Penry said.

"An outbreak of the diseases identified by the biosecurity tool could create significant and measurable losses in farm performance or the wider dairy industry.

"The biosecurity tool allows dairy farmers to manage their risks around 14 separate diseases such as salmonella and BVD."

For each disease, dairy farmers can identify control measures under the seven categories of stock movements, herd health, farm inputs, visitors, effluent and waste, neighbours and dead animals.

Agriculture Victoria development specialist Dr Sarah Chaplin said the new online tool would help farmers understand how to manage their own biosecurity risks.

"The control measures offered by the tool for each disease are evidence-based, based on the level of risk that you have chosen," Dr Chaplin said.

"Users decide what level of control they want to apply to different diseases with the tool's risk matrix.

"It's still subjective - it's up to the farmer to decide whether they consider the consequences minor, moderate or severe.

"Once the farm's specific animal health risks are identified, scientifically valid control measures are suggested."

Focused control measures have a better cost:benefit ratio than blanket application of all possible control measures.

Dairy farmers can access the biosecurity tool at biosecurity.dairyaustralia.com.au. Farmers already using DairyBase can use their existing login details.

Victorian dairy farmers will be the first to have access to regionally based workshops where a delivery approach will be piloted before national roll out of the biosecurity tool.

Source: Australian Dairyfarmers 3 October 2019

Farmers and drought-affected communities to receive an extra $100m in federal funding

Drought-affected communities and farmers will get an immediate cash injection, with the Federal Government promising a new $100 million support package.

Key points:

  • The Federal Government commits an extra $100 million for drought-affected communities

  • More than half of the money will go towards the Farm Household Allowance to make it more accessible

  • Local governments will also get money to spend on projects to support their communities

  • Fresh from his tour of the United States, Prime Minister Scott Morrison will today visit drought-ravaged Dalby, on Queensland's Darling Downs, to pledge the money.

  • The package includes a $33 million commitment to resuming the Drought Community Support Initiative, which provides cash-strapped farmers, contractors and families with emergency payments of up to $3,000.

  • That program is administered by the Salvation Army, St Vincent de Paul and other charities to ensure it targets those most in need.

  • The assistance also includes $1 million payments to 13 additional local government areas to spend on water infrastructure upgrades, mental health support and other projects deemed necessary.

  • The LGA's to received those funds include the Western Downs in Queensland, Temora in New South Wales, Coorong in South Australia and Moyne in Victoria.

  • The Government will also commit $51.5million to simplify and extend the Farm Household Allowance (FHA), which is paid out at the Newstart rate to eligible farmers.

A recent farmer-led review found the FHA program was unnecessarily complex and did not work for farm business operators.

The Government estimates there are currently 24,000 farmers who would qualify for the payments, but fewer than 7,000 currently receive it.

The Coalition has already made changes to simplify the FHA application process, but the federal Agriculture Minister Bridget McKenzie described today's changes as a "radical simplification" of the "application process and key settings".

"We will remove the requirement for business income reconciliation, change the time limit on payment from four years in total to four out of every ten years, simplify the assets test, recognise agistment as being part of primary production income, and redesign the application process," she said.

"For the first time, couples will be able to apply for the payment using just one application."

The Prime Minister came under pressure this week for Australia's perceived lack of action on climate change policy, and he defended the Government's commitment to drought support.

The National Farmer's Federation continues to call for a comprehensive drought policy and has previously criticised the Coalition for offering short-term hits instead of a long-term strategy.

Source: ABC News By regional affairs reporter Lucy Barbour and national rural reporter Kath Sullivan