ACCC disappoints dairy

By QDO President Brian Tessamann

The Australian Competition and Consumer Commission (ACCC) Dairy Inquiry interim Report, released last week, not only disappointed Queensland dairy farmers but failed to deliver clear direction and intent to fix the mess destroying Queensland and Australian dairy farms.

It is strange that while the report acknowledges many of the major market issues affecting our industry, it offers precious little in the way of recommendations to fix them. These issues include the fact dairy farmers have little to no market or bargaining power, and carry a disproportionate and overwhelming burden of risk in the value chain.

In fact, the ACCC tries to use this issue to distract attention from the damage caused to the industry by $1 per litre milk. The ACCC report claims that because farmers have barely any market power now, they would receive little benefit if supermarkets ended $1 milk since supermarkets and processors would pocket the revenue. This completely ignores what the Inquiry was set up to do in the first place, which was to fix the whole value chain to allow benefits to flow to the farm gate. It also ignores the $200 million ripped annually from the dairy value chain by supermarket discounting and generally avoids recognising the crippling market failure stemming from the supermarket duopoly.

While QDO supports the report’s only recommendation to change the recently introduced farm gate code of conduct into a mandatory code, it should have been obvious the industry needs far more than this to create a fair and functioning market.

It is becoming clear the ACCC does not have the general intent, operating scope or legislative tools to fix what should be a very fixable issue. So while QDO is willing as always to work with the ACCC with whatever meagre assistance is given, it is time for politicians who support a fair go for Queensland dairy farmers to deliver on the clear political promises and community expectations the Inquiry was originally set up to fulfil.

Dairy AGM’s and board appointments

By QDO President Brian Tessamann

In the Dairy Industry, late November is always a busy time of Annual General Meetings (AGMs) and an election or two, especially this year with Queensland’s State election raging. Last week saw both Dairy Australia (DA) and Australian Dairy Farmers (ADF) hold their AGM’s in Melbourne with both electing two new directors. Of particular note was the retirement of DA Chair Geoff Akers from the Board. Geoff was appointed to the Board in 2005 and became the third-ever chair in 2013. QDO thanks Geoff for his work for Dairy Australia.

The ADF AGM saw the retirement of Tyran Jones and independent director DeDee Woodside from the ADF board, whom were  replaced by John Versteden and Victoria Taylor respectively. In his address, ADF President Terry Richardson welcomed new CEO David Inall to the organisation and thanked interim CEO John McQueen for his assistance through a difficult time. The theme of the industry breakfast at Flemington last Friday was innovating and adapting to change, particularly in relation to industry organisations and structures. Attendees were urged to look at the effectiveness of their respective industry organisations whether they were service, advocacy or commercial providers. They were also asked to consider what might be the right structure for these objectives, opportunities and challenges. It was an important reminder that no structure or organisation is sacred. They must either deliver for dairy farmers or evolve into something that will.

On the other big election, QDO congratulate Premier Annastacia Palaszazuk on what looks like a Queensland Labor parliamentary majority. QDO look forward to working with the re-elected Labor government over the next term to improve the lot for the state’s dairy farmers. In particular, QDO look forward to continuing its constructive work with the Labor Government to deliver the industry led ‘Fair Mark Milk Logo’ for consumers.

2018 pricing locked in and looking up

By QDO President Brian Tessamann

For many Queensland dairy farmers, this year’s pricing signals are much clearer than they were last year. This comes in light of Parmalat Australia’s joint announcement with the collective bargaining group Premium Milk last week of stable pricing for next year except that the seasonal incentive payment for July 2018 will be halved from two cents to one cent per litre. The announcement follows only a few months after the 2017 pricing was finally settled by an arbitrator at what amounted to a year-round reduction of just over 0.8 cents per litre.

While Queensland Dairyfarmers’ Organisation (QDO) and its members find any price reductions disappointing, the drop does reflect price reduction in the domestic market during this period, including with Lion’s Queensland suppliers and many of Parmalat’s suppliers in southern states. At least now local Parmalat suppliers, who collectively account for over half the state’s dairy farmers, know full well what to expect in next year’s pricing negotiations and can make business management decisions accordingly.

There was better news for Norco suppliers following the co-operatives AGM in Toowoomba last week. Chairman Greg McNamara reported that Norco had achieved a net profit of $1.122 million while managing to increase the average member return by 0.12 cents per litre. He noted much of this stemmed from an increase of 2.7% in total sales and an increase of 34.6% in Norco’s branded milk sales. QDO believes at least some of that increase in branded sales has derived from QDO’s industry leading ‘I buy branded milk’ campaign. Mr McNamara also welcomed new CEO Ben White to the co-operative.

With some good news on the international dairy market, particularly around the value of milk fat and possibly the settling of Murray Goulburn’s troubles, farmers should have every right to feel more hopeful that next year will see a rise in domestic milk prices.

When it rains, it pours

By QDO President Brian Tessamann

After experiencing a very dry August and September, the significant rainfall over South and Central Queensland has been a welcome change. As is often the case with weather, however, you can get too much of a good thing, which is the current sentiment of many dairy farmers.

The recent rainfall in the North Burnett and Wide Bay regions delivered severe flooding, not only inflicting structural damage but also leaving dairy farms with a critical feed shortage situation. QDO has been active in supporting its members and the State Government has agreed to activate Category B assistance for primary producers in the North Burnett, Bundaberg and Gladstone Regions. This assistance entitles farmers access to 50 per cent freight subsidy which can be used to fix fences as well as moving fodder.  Access to concessional loans of 1.16% for recovery are also available to affected farmers. More information is available at Queensland Rural and Industry Development Authority’s (QRIDA) website: www.qrida.qld.gov.au

Farmers in Category B regions can also access freight subsidies of up to 50% for brought-in grain and fodder. More information can be found on the Department of Agriculture and Fisheries (DAF) website: https://www.daf.qld.gov.au/

QDO will continue to advocate for Category C assistance for its members in North Burnett and Wide Bay. These applications are being progressed as Government waits to determine the cumulative damage from each region. QDO in conjunction with Queensland Farmers’ Federation (QFF) is gathering damage estimates to assist DAF with this process.

Over most areas of Queensland, the rain has significantly increased this season’s potential, particularly when compared to the dry heat of last summer. It is important, however, that Government also helps farmers who have weathered through a run of floods and suffered damage to their infrastructure and feed supply, so they can continue to produce milk and stay in the industry.

 

Drop electricity prices or help farmers use less

By QDO President, Brian Tessmann

Despite another week of energy policy posturing, Australia’s climate and energy strategy is getting little traction and remains under pressure from powerful coal interests. There seems to be an attempt from both sides of politics to confuse consumers as to the real cause of higher power prices.

Both politicians and the media appear complicit in continually discussing power generation issues by making wild claims about future blackouts. All the while smoke-screening the real causes of energy price increases that have nothing to do with whether the power is sourced from renewable or coal technologies. Electricity distribution costs, overvaluing distribution assets, retail profit and government financial return on asset expectations are the main reasons behind the ‘energy crisis’ gripping the nation.

Put simply, most renewables can match dirty coal for generation costs. So called clean coal technologies, if ever successful, will likely be more expensive. But generation costs are not the real problem.

The question most rural and regional advocacy groups have been asking for years now is how post-generation costs can be lowered to reduce the strain on farmers and their businesses. It seems clear the Federal and State Governments have no interest in addressing this issue no matter what options are put to them. The result has led to more consumers, including proactive farmers, looking to generate their own renewable power, with some considering in-party or going off the grid entirely. However, the major concern is that as consumers go off-grid, costs for those who remain will increase. This is an untenable situation for farmers who are already dealing with unsustainable prices.

The fact is all dairy farmers use energy for milking and cooling milk. Many also use it to power their substantial irrigation infrastructure. For our local dairy industry to remain internationally competitive, the cost of this energy has to be slashed. To save our dairy industry’s viability, the State and Federal Governments must fund programs that assist farmers to implement on-farm efficiencies or create their own renewable generation.

QDO biosecurity workshops a major success

By QDO President, Brian Tessmann

QDO held the last of its biosecurity workshops in Malanda last week. In total, QDO ran 13 workshops across all dairy farming regions of Queensland from the Tablelands through to Beaudesert. Almost 60 per cent of QDO members attended the meetings which was a great effort from participants. An astonishing 91pc of members attended the workshops in the north in Malanda and Millaa Millaa, which is an astounding number, especially when 84pc of all dairy farmers in the north are QDO members.

While most farm businesses are not big fans of paperwork and meetings, most farmers who attended the workshops gained a much better appreciation of biosecurity. Most participants decided on clear activities to undertake on their farms which will be valuable to them in managing biosecurity risks.

I would like to thank all those people who help make these workshops happen. A special thanks to QDAF and specifically Lawrence Gavey and his team of local vets and stock inspectors for helping to organise and deliver the workshops. Without their assistance and expertise, these events would not have been possible. They created better links between dairy farmers and local Queensland Department of Agriculture and Fisheries (QDAF) staff which is very helpful. It is great to see QDO and QDAF working in partnership to assist farmers to adjust their practices to meet their biosecurity obligations.

At this stage, QDO does not intend to run additional workshops. However, if there are QDO members who have missed out on attending, please contact QDO and we can try to organise further meetings if there is sufficient demand. Alternatively, QDO may be able to assist farmers develop biosecurity plans outside of a workshop.

The next step in the process for dairy farmers with biosecurity plans is to undertake slurry tests for Johnes Disease. Over the next month, QDOwill decide on a pathway forward and contact its members to see if they would like tests to be undertaken on their farms.

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 www.qff.org.au/reef-alliance/awards

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

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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.