ACCC Time Extended

By QDO President, Brian Tessmann

The final reporting date for the ACCC inquiry into the dairy industry has been extended by the Federal Treasurer until 30 April 2018. Allegedly, the ACCC requested that the Treasurer grant it an extension to allow for an extended consultation period with industry following the release of its interim report which was initially scheduled for November this year.

While this delay is disappointing to Queensland dairy farmers, hopefully it will result in the ACCC working closer with farmer groups including Queensland Dairyfarmers’ Organisation (QDO). QDO believe this closer working relationship will be critical in addressing and remedying the problems in the domestic milk market.

Deputy Prime Minister Barnaby Joyce previously said he will fix the domestic milk market issues including ending $1 per litre milk. It was in this vain that the Deputy PM and the Treasurer charged the ACCC to carry out this inquiry with the explicit intent of finding a resolution. Therefore, it is vital the ACCC does not continue to hide behind certain failed ideological beliefs, but instead steps up to the reality and recommend how current laws can be fixed to provide fairness to the market.

The recent Senate Economics committee report also outlined some of the industry’s issues and provided some key recommendations around collective bargaining and fair contracts including codes of conduct. At the end of the day there is no point having these inquiries if they do not do anything to fix the industry.

As one key government player said to us recently during an informative debate in Canberra, the fact is deregulation has failed in at least two industries; the electricity industry and the dairy industry. Government must act to either fix markets so they work once again or reverse the deregulation back to how we had it before.   

City MP spends a day on the dairy

By QDO State Councillor, Brendan Hayden

It is not every day that a politician offers to come out and lend a hand on a dairy farm. It is even rarer when that politician is a Labor MP from Brisbane without a single dairy farm in his inner city electorate.

Recently, member for Greenslopes Joe Kelly and his family visited our dairy farm in Pilton on the Darling Downs. He traded in the suit and tie of the chamber for the apron and gloves of the dairy pit. It was refreshing to spend a day with a politician in a very real and honest setting, contrary to the usual censored and non-committal state we have become accustom to.

While I do not intend to go into all the details about what was discussed, it would be fair to say that before his day on the farm, Joe had a limited understanding and appreciation of the real challenges faced by Queensland dairy farmers. After spending a day together, Joe had a much better understanding of how detrimental $1 milk has been to the Queensland dairy industry and why it is so important to fix the problem with programs like the Fair Milk Logo.

Overall having Joe out on the farm was a very positive experience for both of us as we learned and got a better appreciation of what one another does day-to-day. If more politicians spent a day or two out on farm I genuinely believe, at a very minimum, we would all get a better understanding of how and why dairying has been and will continue to be essential for Queensland.

Queensland Dairyfarmers’ Organisation (QDO) now extends the same offer we made to Joe to all other state and federal MPs in Queensland. Come spend a day with one of our members and we can promise you that you will walk away with a new appreciation for that milk on your cereal or in your coffee.

QDO is ready to help members tell our industry’s story and encourage them to personally invite their local MPs to come out to the farms and experience the life of a dairy farmer.

Reef awards to showcase industry’s best

By QDO President, Brian Tessmann

Dairy has always been a proactive industry when it comes to natural resource management and we should celebrate this with showing our wider community the custodial nature of our farmers. While dairy is by no means the largest agricultural impactor on the Reef it continues to a sector wide leader in implementing on-farm best management practice changes to reduce its footprint. 

The Reef Alliance Awards is a fantastic opportunity to do this. It is so important that as an industry and a community we recognise the efforts our farmers are making towards improving their land management practices and thereby the water quality flowing into the Great Barrier Reef.

Over the past 9 years through funding from the Australian Government’s Reef Rescue and Reef Programme the dairy reef programs have engaged 157 farms, been able to support the development of 149 soil and nutrient management plans and provide support through incentives to 71 farmers with 119 projects valuing a total of $3 million.

In previous years of the Reef Alliance Awards we have celebrated farmers such as Dennis Brynes from the Atherton Tablelands who has made improvements to his effluent management system, irrigation system and riparian areas through creek crossing. Dennis has been a great ambassador and example of how Queensland dairy farmers are leading the way in implementing on-farm changes making a big difference.

I encourage all farmers to think of any of their neighbours and fellow farmers that should be recognised for their contribution towards improving the quality of water leaving their farm through either improved nutrient, sediment or pesticide management. It is essential that dairy farmers continue to step up tell their good story on behalf of the industry and the sector as a whole.

Proactive programs like the Australian Government’s Reef Programme and similar programs are essential for the accelerated adoption of improved management practices on our farms. And we welcome the opportunity by all Government sectors to continue with similar projects.

For more information on the Reef Alliance Awards please visit

QDO takes dairy issues to Canberra

By QDO President Brian Tessmann

For three days last week, Queensland Dairyfarmers’ Organisation president Brian Tessmann, executive officer Eric Danzi and adviser Mike Smith travelled to Canberra to meet with members and senators from both sides of the chamber. The key meetings included Shadow Agriculture minister Joel Fitzgibbon and Barnaby Joyce’s office. Mr Fitzgibbon agreed to work with QDO on some more innovative ideas and we found the deputy PM’s key adviser, Simon Price, to be very knowledgeable on the issue and open to working through options.

QDO also received strong support from Queensland LNP Senator James McGrath and House of Representative Members Llew O’Brien (Wide Bay) and Scott Buchholz (Wright). QDO received interest from the Shadow Assistant Treasurer, Andrew Leigh, who was keen to find out more about the unfair competition issues plaguing Queensland dairy farmers.

High on the discussion list for all members were the ‘effects test’, unfair contract legislation, the Senate Economics Committee’s recommendations, and the current ACCC inquiry that is set to report on 1 November. In regards to the ‘effects test’, QDO is working to ensure the ACCC properly interprets both the effects and the extension of unfair contract protections to small businesses.

Under existing arrangements, Australian dairy farmers are not entitled to collectively boycott processors or retailers. This means if farmer groups engage in any form of picket line or strike-type action, not only will they be liable for damages, the ACCC could charge the group for engaging in illegal industrial action. This was made clear to QDO and Australian Dairy Farmers’ (ADF) in recent talks with the ACCC which confirmed it would not hesitate in taking legal action against farmer organisations who engaged in such activities.

Most members and senators have agreed to work with QDO to find viable solutions based off recommendations of the Senate Committee and findings from the yet-to-be-released ACCC inquiry. It appears that there was bipartisan, in-principle support for restoring market fairness in Queensland. However, actions will go a lot further than verbal reassurance.

Net milk exports shrinking

By Ross McInnes, QDO Vice President

Australia’s milk production came to a total of just over nine billion litres for the period 2016-2017 after a better-than-expected end to the year. This however, was a massive drop of nearly 7 per cent from the previous year and is a distant memory from 2001 when Australia reached 10.8 billion litres.

Queensland increased its milk production by 1pc to finish at 417 million litres and was the only state across the country to record an increase. Meanwhile, Northern Victoria dropped more than 16pc after an extremely wet spring on top of the Murray Goulburn price implosion.  In 2001, Northern Victoria topped 3 billion litres compared to 2016-2017 where they were down to 1.7 billion litres.

With water cutbacks in the Murray Darling Basin and structural issues facing the industry, it is extremely unlikely that Northern Victoria will ever repeat its history of high production figures. The massive reduction in milk in Victoria has had ramifications on Queensland milk processors seeking to top up supplies for their state. The biggest change since 2001 has been the balance between the proportion of liquid milk sales and export volumes. Exports counted for three times packaged milk sales in 2001 but now they are close to reaching parity.

The domestic market requires an extra 110 million litres each year which creates challenges for Southern processors to maintain a competitive export industry going forward. The result of lower production has seen huge increases of imports onto dairy shelves around Australia. Total imports in dairy manufactured goods on our shelves are now more than 20pc. New Zealand cheese is the biggest contributor with Australian consumers having problems finding little, if any, Australian cheese in the $6 category in the last few months.

In 2001, net exports counted for 5.5 billion litres but this year that number has dropped to 1.8 billion litres. It is clear, Australia badly needs a viable dairy export industry and these numbers should be a concern to everyone involved in the industry.  Unfortunately the result of processor and retailer labours to undercut on-shelf competitors with milk and cheese and remove domestic premiums have been less than helpful to farmers’ sustainability.

Farmers Fire Up at Forum

By Brian Tessmann, QDO President

Tough questions were on the agenda at the Queensland Dairyfarmers Organisation (QDO) AGM and Annual Dairy Forum held in Toowoomba last Tuesday. Guest speakers fielded questions from rightfully frustrated and increasingly impatient dairy farmers on what governments and industry were doing to deliver real market changes needed to fix current failures.

Earlier in the day, farmers were entertained by a thought-provoking and often humorous presentation by former professional Rugby League footballer Shane Webcke, who outlined his past experiences and current philosophy regarding work place health and safety. Farmers were also given the latest information on various markets in the Dairy Australia Situation and Outlook Report from Norman Ripocoli from Dairy Australia.

The key people the farmers had come to hear were Mick Keogh, Head of the ACCC Dairy Inquiry, and Chris Ketter, the Chair of the Senate Economics Committee, who have been undergoing inquiries into the dairy industry. I would sincerely like to thank the Senator for diligently taking on some pointed questions from the floor. I was encouraged to hear he supports making the code of conduct mandatory.

It was however concerning to hear Mick Keoghs now doubts most dairy farmers would be covered by the new unfair contract protection extension despite his earlier public assurances. My concern was deepened by later discussions with the ACCC which indicated the recently passed Effects Test would be applied by them horizontally rather than vertically in the supply chain.

I am sure all supporters of the Effects Test, including Deputy Prime Minister Barnaby Joyce, would have intended it to be applied vertically and considered it to be spelt out that way. QDO Executive Officer Eric Danzi and I will travel to Canberra next week to resume discussions with politicians on these issues affecting the industry.

Time for affects to be felt from ‘effects test’

By Brian Tessmann, QDO President

Following the long awaited and fought for passage of the ‘effects test’ legislation through the Senate, there are many now asking where we go from here. Farmers rightfully want to know what the Government is intending to do to progress the test from paper into action. Questions still remain on what exactly this new power will look like and when or whether it will address the issues dairy farmers have raised time and time again.

A multitude of industries including dairy are looking to the Australian Competition Consumer Commission (ACCC) to act upon unfair market practices. As one of the strongest advocates for the test, Queensland Dairyfarmers’ Organisation (QDO) see it as a major component in a range of legislated safeguards and industry authorised practice changes needed to improve market fairness issues affecting rtrade between etailers, processors and farmers.  For the dairy industry, the test should be most useful for market issues occurring between processors and retailers. If applied properly it should also benefit further down the value chain.

It is now up to the ACCC to be vigorous on issues such as predatory pricing, in particular between brands where the market is the supermarket shelf. For example, how is it not predatory to sell one brand on the shelf with little or no mark up, yet set significantly marked up prices on competing brands?

While anyone can raise complaints, it is up to the ACCC to take action and act upon the powers legislation gives them. With the exception of a few large companies, most members and organisations in the dairy industry do not have the wherewithal to do this. Farmers are relying on the ACCC to fulfil this role. As the final touches are being put on the ‘effects test’ regulation and guidelines, the message from Queensland dairy farmers is to get the job done promptly and properly.

A step towards fairer dairy

By Brian Tessmann, QDO President

QDO and most of the dairy industry recognises the latest Senate Economics Committee Report on investigations into Australian Dairy and the Australian Milk Market as a positive move towards improving the entire dairy value chain. While it is not perfect or sufficiently widely encompassing, it will contribute to improving the entire dairy value chain.

The key focus is the need for farmers to be able to access and form more powerful, effective and efficient collective bargaining groups. This may include forming larger groups and giving them more bargaining power and access to improved training.

The Committee also recommended the Australian Competition and Consumer Commission (ACCC) review the Dairy Code of Conduct as part of its inquiry into the dairy industry. The Report recommended the ACCC design improvements that would better address power imbalances between farmers and processors. In reviewing codes of conduct, the Report also suggested whether mandatory codes would be more appropriate for the dairy industry.

Representative organisations of the dairy industry have been encouraged to team up with other sectors of the supply chain to develop an education strategy that provides consumers with valuable customer information so they are better aware when purchasing dairy products.
Overall the Senate report is a constructive document but we now await the report of the ACCC inquiry led by Mick Keogh. QDO hopes, after years of work, these recommendations along with the passing of the ‘effects test’ will finally deliver some fairness for Queensland dairy farmers. 
Calling members to QDO Forum
QDO members are strongly encouraged to attend the QDO forum on 29 August at the Toowoomba City Golf Club. Senator Chris Ketter, Chair of the dairy senate inquiry, will discuss the findings of the Senate review. Mick Keogh, ACCC Agriculture Commissioner, will also present on the status of the ACCC dairy review. Dairy farmers should not miss the chance to see both special speakers in person.

QDO to go ahead with Fair Milk logo


By Brian Tessmann, QDO President

While it was disappointing that the Fair Milk Logo Bill was defeated in State Parliament last week, Queensland Dairyfarmers’ Organisaion (QDO) welcomes Government’s plan to assist industry to develop its own Queensland Fair Milk Logo scheme.

The failed Fair Milk Bill sought to establish a logo scheme that would assist consumers to identify local milk that delivered a sustainable return to Queensland dairy farmers. While QDO would have preferred the Bill as moved by the Katter Australia Party (KAP) to be passed, the financial assistance offered by the government will go a long way to helping industry develop and promote valuable information to inform consumers.

The funding is made up of around $550,000 for QDO to develop the Logo scheme itself, plus $120,000 for the Department of Agriculture to further develop the Queensland Dairy Accounting Scheme (QDAS) and facilitate greater farmer participation. In addition to this, a further allocation of $290,000 will be set aside for the Office of Small Business to assist farmers and small processors to diversify their product range and better develop markets and branding.

QDO is looking forward to finalise details on the funding announcement with the government over the coming weeks. It is essential that a logo is developed and used to add value for both consumers and dairy farmers.

As previously acknowledged by both farm and processor sectors of the industry, one of the major issues that have hurt farmers has been the commoditisation of white milk that has occurred since $1-per-litre milk started in 2011. One major lesson however learnt during the “I buy branded milk” campaign was that many Queensland consumers wanted a clear and simply way to know which brands to buy that support the future of dairy farming across the state.

QDO’s ‘Fair Milk Logo’ will deliver this customer certainty and in turn will deliver for our dairy farmer members and should be welcomed by everyone who supports a sustainable dairy industry in Queensland. 

Fair go at the show

By Brian Tessmann, QDO President

As Brisbane people enjoy the fun of the Ekka with politicians ensuring they are seen in the right places, they all need to remember that if farmers don’t get a fair go soon then Queensland dairy production will become little more than a novelty sometimes witnessed at the show. While many dairy farmers make considerable efforts in preparing a team of cattle to bring to the exhibition, back at home real world financial issues continue to drive more and more of them out of the industry.

It is interesting that the Labor party is targeting inequality as a focus for the next election campaign. You would think one of the first pit stops on their campaign would be to start addressing the genuine inequality within the dairy industry. Market power abuses, inequality in the value chain where the share of risk borne by the farm sector is high and the level of return is low compared to the processors and the retailers a problem that has only worsened over the last decade, show real inequity.

Queensland Dairyfarmers’ Organisation (QDO) has often highlighted these inequalities to all Ekka-goers we can get access to. This year, the notorious QDO crazy cow that discourages the pricing of $1-litre milk may not make a visit. However, I am sure all dairy farmers on site would be happy to talk dairy issues to our interested city cousins.

It is the politicians however who have the ability to fix the unfair status quo.  Both state and federal parliamentarians from all sides need to come together and work with Queensland dairy farmers and farming organisations to give our dairy industry a brighter future.

As you enjoy this year’s exhibition with delicious flavoured milks, ice creams and waffle cones, don’t forget the Queensland dairy farmers who supply it. Remember to remind our politicians as they pose for the perfect photo at the Ekka to give our dairy farmers the fair go they deserve.

Dairy farmers come together to discuss future

By Brian Tessmann, QDO President

The Australian Competition Consumer Commission’s (ACCC) dairy inquiry,  challenges with on-farm workplace health and safety and proposed milk manufacturing plants are ongoing issues for Queensland dairy farmers. These too will all be high on the agenda at the upcoming 2017 Queensland Dairyfarmers’ Organisation (QDO) Dairy Forum and AGM held on the 29 August at the City Golf Club South Street in Toowoomba.

ACCC Agricultural Commissioner Mick Keogh will inform farmers on the progress of the Dairy Inquiry as well as address competition issues between processors, retailers and farmers. Dairy farmers are encouraged to come along and hear the progress of previous complaints into processors’ milk swaps, supply exclusivity clauses in contracts, as well as the role and effectiveness of collective bargaining groups and how to improve them. 

A popular speaker on the agenda is former Rugby League great Shane Webcke. As Queensland’s Safety Ambassador, Shane will share is powerful and personal experiences around the importance of following workplace health and safety processors on our farms. Whether you know him as a front row forward for the Maroons or a Seven News sports presenter, he is definitely one special guest who is not to be missed.

Returning again this year is Steve Laracy from the proposed Integrated Milk Project at the Wellcamp Airport. Many dairy farmers are eager to hear about the progress made on the timelines Steve outlined at last year’s forum. With many farmers being keen to see the first concrete slab poured, there is a broad understanding that this project has the potential to be a game changer for Queensland dairy farmers and therefore must be done right.

QDO encourages members to come along to the Dairy Forum and the AGM to hear from distinguished speakers and have the opportunity to join the conversation and discuss topics relevant to the future of the Queensland dairy industry.

Dairy Biosecurity Workshops

By Brian Tessmann, QDO President

Queensland dairy farmers have always committed to keeping their farm businesses free from pests and diseases. It is because of this that Queensland dairy farmers are concerned about the rules changes made last year to the state’s biosecurity legislation around managing and limiting the spread of both Cattle Ticks and Bovine Johnes Disease (BJD). 

In a nutshell these changes were about transferring more of the onus of biosecurity responsibilities and prevention management from government to the farmer. The new legislation places a biosecurity obligation on all farmers to stay free of pests and disease and, more importantly, not to infect anyone or anything else with a pest or disease.  

To assist farmers with their obligation to preventing diseases such as Bovine Johne's Disease and Cattle ticks, Queensland Dairyfarmers’ Organisation (QDO) and Queensland Department of Agriculture and Fisheries (QDAF), will be running a number of free workshops for QDO members. 

QDAF staff Lawrence Gavey (BJD expert) and Malcolm Macleod (tick expert) will be assisting in facilitating the workshops, which will provide disease management options for farmers. These workshops offer a chance for farmers to develop accredited biosecurity plans to ensure their properties remain free of infections. These plans will allow farmers to demonstrate their infection free status to cattle buyers, milk processors and other interested parties. 

Unlike southern states, where Bovine Johnes Disease is commonplace amongst the dairy industry, Queensland has maintained its status as free from the disease. If the QDO biosecurity program is followed it can be expected most QDO members will maintain a Bovine Johnes Disease Dairy Score of seven or better, ensuring future markets remain open and viable. 

I encourage all members to attend one of these biosecurity workshops find out how to protect both their farms and themselves under the new biosecurity obligations. The first of these workshops will be held in Gympie and Kingaroy on 8 August and Toowoomba and Warwick on 9 August. Spaces are limited so if you are a QDO member in these areas please contact QDO and book your place.

Farmers and processors both deserve more money from retailers

By Ross McInnes, QDO Vice-President

Queensland Dairyfarmers’ Organisation (QDO) fully supports processors in their attempts to increase the price of all dairy produce in retailers with the goal to improve the value of the entire supply chain. However, farmers are rightly frustrated when processors ask for more from retailers but, in the same breath, pay us less.

Farmers need a viable processing sector, and processors need a viable farm sector to supply a sustainable raw product. There is no doubting that processors’ costs have increased in recent times. But so have farmers’. My electricity price for irrigation went up by 10.8% this month and is over 350% over the last eight years. The farm sector’s terms of trade has reduced by more than eight cents per litre since 2011 started and no doubt, the processors figures would be similar.

Since the decision was made in 2011 to dramatically discount white milk in Australia, QDO and Australian Dairy Farmers (ADF) have consistently condemned retailers’ actions that have negatively impacted farmers. The white milk processors of the dairy industry have been severely impacted by the introduction of discounted milk, but many continue to supply to supermarkets that stop their brands from reaching higher values. The pressure from the retail sector on processors to tender ‘competitive’ prices is clear when factoring the power retailers have over processors in controlling the distribution of processors’ full range of products.

Within our region Norco has held their price, Lion has reduced their price and Parmalat is seeking a reduction through arbitration. Twelve months ago, Murray Goulburn reduced their NSW farm gate price by nearly five cents per litre and their implosion allowed other processors to reduce their milk cost as well. Processors have now used the NSW situation to justify a degradation of the Queensland price.

Processors deserve more from retailers, but farmers also deserve more. Cost increases affect us all, except the major supermarkets it would seem.

Queensland milk price puzzle

By Brian Tessmann, QDO President

The outcomes from farm gate milk price negotiations between milk processors and farmers in Queensland has ranged from puzzling to perplexing.

While Norco has managed tohold its milk price paid to farmers, Dairy Farmers Milk Co-operative (DFMC) members who supply Lion in southern Queensland are looking at around a half a cent per litre drop in farm gate price. Lion suppliers in North Queensland are also likely hold their price, however they may end up paying the freight on the majority of excess milk that might need to be transported south to find a market. 

This could be around 25 cents per litre if spread across all northern Queensland milk potentially exceeding a one cent per litre cost depending on the amount of excess milk.

The Parmalat farm gate price for the current calendar year however remains a mystery even after the six months since the contracts were due to be renewed. During this six months the price farmers have been paid has been down three cents per litre as no current resultant bonus payment mechanisms are in place.

The twists and turns of the wrangling between Parmalat and the collective bargaining group Premium Milk over the past 12 months has left many farmers feeling financially insecure with many of their futures left in the dark. 

With no clear idea as to when farmers will see some of that three cents per litre returned to them, the financial and emotional stakes are high.

WhileQDO is required legally to not be involved directly with these price negotiations, it is always ready and willing to provide advice or information to farmer collective groups undertaking these negotiations and has done so on many occasions.

It is disappointing that some milk processors have used these price negotiations as opportunities to improve their margins at the expense of Queensland dairy farmers who as is often the case, are in a weak bargaining position.

Toowoomba formula promising for dairy industry

By Brian Tessmann, QDO President

The Queensland Dairyfarmers’ Organisation (QDO) has always been willing to assist with new market opportunities that will collectively benefit our industry and our farmer members. The Integrated Dairy Project proposed by LARPRO and their General Manager Steve Laracy looks to be one of the most promising and practical market opportunities in recent times. While dairy farmers are understandably cautious, following disappointments such as the shelving of the Hope Dairies project, they are still keen to see new market opportunities open up.

Over recent years Mr Laracy has kept in contact with QDO including his attendance at our most recent board meeting last month. He was also a key speaker at the QDO Forum held in Toogoolawah last year where he clearly outlined the advantages of building a dairy manufacturing plant in close proximity to the Wellcamp Brisbane West International Airport. He spoke on advantages that come with having a lowest cost freight option to get quality dairy products flown into the big population centres in southern China.

As with most things worth doing, it won’t happen overnight and dairy farmers will understandably get lot more interested once the first concrete is poured. The project will move sensibly in stages with a two-year gap before local milk intake commences. Once the plant makes its mark on the southern Queensland milk market, and as the project looks to expand, there will likely be an increase in demand and competition within the region.

This project has offered the strongest outlook and prospects when compared to various genuine and tyre kicker schemes QDO has heard over the past several years. To update farmers and the industry, Steve Laracy will once again be a speaker at our QDO AGM Forum to be held on 29 August in Toowoomba. I urge members to attend the forum to ensure they remain up-to-date and aware of business opportunities as they present themselves within the Queensland dairy industry.

1st July – Let’s push the power price up

By Ross McInnes, QDO Vice-President

With the becoming of a new financial year brings with it that unpleasant yearly ritual of of the jolt we all experience from our increased to electricity bills.

When I look at our old accounts from December 2008, the off peak rate was 7.1c/kwh. From next week that will rise from 23c to 25.48c/kwh, which is a rise of 10.8 per cent this year and 358 per cent in just over 8 ½ years.

The most bizarre part of this increase means that the off peak power is now 4 per cent more expensive than the domestic rate. There is no way that energy retailers can seriously maintain power supplied to irrigation users between 9pm and 7am more expensive than domestic consumption during peak load periods. It now raises the unfortunate reality that the cherry picking that has resulted in the doubling of irrigator’s tariff increase compared to domestic tariffs has been politically motivated rather than cost reflective.

Prior to this year the reason for the increases has been to pay for the gold plating of the electricity network which was valued at a rate of return at least twice the best investment rate available. This year however, the daily charges have gone done by about 5 per cent, but the reason given for this increase has been the generation costs. The generation costs make up less than one third of the retail cost, so we are led to believe that these costs alone have contributed to the overall increase.

At present there is no transparency in electricity generation cost. Advocates for renewables continue to quote cheaper costs, yet we not yet seen a situation where increases in renewable regeneration have resulted in reduction in electricity charges for consumers.

Worst of all, there appears to be no desire from any state government around Australia to reduce electricity prices, because the dividends flowing into treasury coffers continues to prop up State budgets. It’s a good thing we still have our sense of humour, because we need it.

Nowhere Budget​​​​​​​

By Brian Tessmann, QDO President

The State Budget handed down by Queensland Treasurer Curtis Pitt last Tuesday has done little to give clear direction for the state’s economy or provide a better deal to its efficient but struggling dairy farmers. While we appreciate the government’s continued drought assistance, many of our industry’s real priorities have not been addressed.

High on the agenda for farmers is a reduction in electricity costs that are crippling many agricultural industries, including dairy. It has been disappointing that much of the hype around power issues has been driven by advocates for the coal industry rather than those looking to build an efficient and sustainable electricity system.

As power generation costs amount to around a quarter of our electricity bills and most generation sourcesrelatively comparable the state government needs to proactively look at costs in the rest of the electricity supply chain. These range from electricity distribution costs to the network valuation and dividends returned to the government on power assets post the generation units, as well as profit levels of electricity retailers. It is essential that government works alongside industry to continue assisting farmers to reduce their electricity use through implementing efficiencies and adopting renewable alternatives.

Also absent in the State Budget was government support to help inform consumers about what is sustainably priced fresh milk from Queensland. It was disappointing that the members from both major parties on the parliamentary Agricultural Committee backed away from recommending the Fair Milk Logo Bill as a vehicle for informing consumers and helping their state’s dairy farmers.

Considering there is a state election approaching, we remind both sides that support is a two way street before they consider not passing the bill. There needs to be a significant and effective plan B if the decision is made to sink the Fair Milk Logo. Queensland Dairyfarmers’ Organisation (QDO) is ready and willing to work with both parties to ensure our farmer members get a fair go.

Looking for Guidance on Electricity Pricing

By Ross McInnes, QDO vice-president

Energy prices are at the forefront of peoples’ minds these days with consecutive price hikes and wild fluctuations all part and parcel with what farmers have come to expect.

Australian Chief Scientist Alan Finkel released his much awaited Energy Report last week, but anyone who was expecting substantive information on which to base business decisions would have been left disappointed. The perceived trigger for conducting the review was the 50% rise in consumer electricity costs and the appraisal that this review would be better than doing nothing at all.

However, this is underwhelming for agricultural businesses that have seen their off peak charges rise by 300-400% in the last 8 years. I am sure the 4.9 million Queenslanders who contribute an average $265 per year to the Queensland Government’s $1.3 billion dividend from the electricity sector must be thinking the same thing.

Ever since we signed up to achieve the Renewable Targets to reduce CO2 emissions, there has been a complete vacuum of information coming from all levels of government. There is a universal view that renewable sources of energy will become cheaper by comparison. If the cost of electricity is continually gouged by 20 or 40 or 50% per year, then renewables will certainly appear cheaper.

In a recent survey by a national paper, it was revealed many people believe the price of electricity will increase if we don’t have a renewable target, but the facts do not back this up.

Professor Finkel said to the Senate the other day “renewables are cheaper than coal”, but he doesn’t know how much electricity prices will rise, which is difficult to comprehend.

If Professor Finkel is correct, why does solar get a guaranteed feed in tariff three times higher than the present cost of coal generation?

Some clear guidance from our elected representatives and scientists would be very welcome.

ACCC meet with Tableland dairy farmers

By QDO North Queensland State Councillor James Geraghty

QDO State Councillor, James Geraghty 

QDO State Councillor, James Geraghty 

The Australian Competition and Consumer Commission (ACCC) recently held a forum in Malanda to hear from local dairy farmers as part of its national inquiry into the dairy industry. The Tableland dairy farmers who attended the meeting joined a total of over 600 farmers who had already attended one of seven forums held throughout the country.

The national inquiry focuses on the fairness of contracts between farmers and processors as well as other sections of the industry. This includes an analysis into distribution of profits; investigating milk swaps between processors;  transparency of pricing calculations; and whether or not collective bargaining is working within the dairy industry.

The difficulties with shifting from one processor to another was of particular concern to dairy farmers who expressed dismay that one major processor in Queensland renews contracts in July while the other major processor renews in January.  Furthermore, government bodies are under pressure to make amendments to current legislation that outlines processors have no obligation to listen to or negotiate with collective bargaining groups.

The main conversation around the distribution of profits in the dairy industry concentrated around issues associated with $1 per litre milk, $6 per kilogram cheese and the negative flow on effects these products can have on the supply chain in different dairying regions. 

Once again the question was asked of whether farmers were living on the depreciation of their assets. The amount of depreciation accumulated on an asset is meant to be put aside and used to purchase a replacement asset when needed. However, in most cases, this is not happening.  The assets are wearing out and farmers are being forced to borrow money to buy new ones. This is opposite to how a viable ‘business’ should be operating.

On behalf of dairy farmers on the Tablelands, I want to thank Queensland Dairyfarmers’ Organisation (QDO) and the ACCC staff for facilitating the Malanda meeting and allowing local farmers to have their say on this very important inquiry.

Milk Price Dispute Drags On

By Brian Tessmann, QDO President

The ongoing milk price dispute between Parmalat and the collective bargaining group that represents the majority of their Queensland dairy farmers, Premium Milk, continues to cause considerable financial and emotional distress to affected dairy farmers. Since the beginning of the year just under half of all Queensland dairy farmers have technically been without a contract despite still supplying Parmalat.

This uncertainty has been compounded with the absence of the three-cent per litre incentive in last year’s contract which is no longer being paid. While reports suggest refunds will be paid once the price determination is settled, many suppliers in their current state are really hurting. Like many farmers, I believed once the old contracts ended without agreement on December 31 last year that the arbitration process would then be initiated, progressed and finalised within a few months. Currently we are approaching the five-month mark without a contract resolution in sight and consequently no three-cent incentive refunds.

While Queensland Dairyfarmers’ Organisation (QDO) strongly holds the belief that any decrease in farm gate price is not warranted, QDO is legally prohibited from directly participating in price negotiations. Around deregulation in 2000, QDO and its then president Pat Rowley, were instrumental in achieving Government approval to establish the limited present day collective bargaining arrangement which resulted in the establishment of Premium Milk.

Clearly more needs to be done to improve the efficiency and effectiveness of our collective bargaining groups. This should and will hopefully be addressed in the Australian Competition Consumer Commission’s (ACCC) ongoing review of the dairy industry. A vibrant and robust collective bargaining system is in both our farmers and the broader Queensland dairy industries immediate and long term interests.

Judging from the volume of calls to QDO alone, it is vital for Parmalat suppliers that this current process is brought to a fair, prompt and just conclusion. This will give Queensland dairy farmers the certainty and stability they need to continue supplying high quality and reliable fresh milk to our consumers.