Outtakes from the Mandatory Code of Conduct consultations.

Three consultations on the Mandatory Code of Conduct for the Dairy Industry were held in Boonah, Gympie and Malanda over the last 2 weeks. Facilitated by Jo Grainger, Assistant Secretary for the Department of Agriculture and Water Resources, the consultations were open and transparent, and it was felt that the Department genuinely wanted to know what the industry believed should and shouldn’t be included in the Code.

The first question that was asked at each consultation was ‘What are we trying to achieve with a Mandatory Code for the dairy industry?’ It wasn’t a question that was expected or that has been asked before. The answer was simple – fairness for all players across the supply chain. Unfortunately, it is clear that the Code will not cover the conduct of retailers as they are theoretically covered by the voluntary Grocery Code of Conduct.

What Queenslanders call Step downs were perhaps the major concern and were a key talking point. Certainly, there needs to be a provision to allow alterations to the pricing in the major processors long term contracts to allow for clear market changes.

If such a step down (price reduction) is required due to market forces, then there needs to be a threshold where suppliers have the option to leave. We believe that a 5% drop on the contracted price should be the threshold for farmers to match or leave without penalty. 

Clearly the current practice of multiple-year lock in contracts with a processor when the contracted price is only set for 12-months cries out for an agreed mechanism for setting future price whether up or down. Also having bonuses and penalties means that there is constant uncertainty and using loyalty payments (and penalties should you leave) to lock in suppliers is something that the Code needs to address.

Currently, the loyalty payments are not a reward for loyalty, but are part of the non-contract base price. There is no intention of trying to make loyalty bonuses illegal, but we should call a spade a spade and call them supply contract bonuses.

Resolving these key points would be a major win for suppliers.

Another key area for discussion was the process of dispute resolution; specifically, who would be responsible for and fund mediation. For the large processors, it would be expected that they would employ an officer to handle disputes. But independent and smaller processors were unlikely to afford a full-time staff member. It was suggested that as a way of encouraging supply to smaller processors, that those processing somewhere between ½ to 1 million should be exempt.

Overall, this first round has been handled extremely professionally by the Department and QDO hopes that this transparency and true consultation continues.

Queensland Dairyfarmers' Organisation Vice President: Matthew Trace.

All types of dairy at processor summit.

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Queensland Dairyfarmers’ Organisation with the assistance of the Queensland Government Office of Small Business, held the first summit of independent dairy processors at Portside in Brisbane on Tuesday last week.

While traditionally, QDO has represented only dairy cattle farmers, the invitation to attend the summit and mentoring workshop was extended to farmers of buffalo, goat, sheep and camel dairy farmers.

The issues that face our traditional membership base including fodder prices, freight, irrigation, biosecurity and animal welfare are also faced by these farmers. Currently there are less than a dozen farmers specialising in non-dairy cattle farming and processing in Queensland, so it made sense to extend the invitation so that they too can benefit from the assistance that QDO offers its members.

Most of these farmers, including the Thompsons from Maleny Buffalo, are former bovine dairy farmers who, at the time of deregulation, decided to look at alternative herds in order to remain profitable and to continue farming. While the market for these products is quite young in Queensland, the appetite for alternative artisan cheeses, milk and yoghurts is growing.

Peter Gross from Black Pearl Epicure, Wendy Downes from The Cheeseboard, Dr Jonathon Staggs from the University of Queensland led the morning session with the discussion largely around the importance of developing and marketing Queensland cheeses and other value add dairy products and building a strong national reputation for quality.

The afternoon’s session had Office of Small Business, Mentoring for Growth mentors Darren Walsh and Joe Barnewall provide strategic advice on business development and expansion. It was interesting but not surprising to hear that the same key issues including maintaining supply of product, finding appropriate staff, the cost of compliance and frustrations around finance were raised by most attendees. 

Feedback from attendees has been overwhelmingly positive. There were some pivotal introductions made and a commitment from the Office of Small Business of ongoing assistance to processors. A huge thank you to all the speakers and mentors and to the processors who took a day out of their busy schedules to attend the workshop and summit.

Queensland Dairyfarmers' Organisation Marketing Manager, Sarah Ferguson

Update from up North.

Our focus for the last few months has been on our drought declared regions, but we always need to pay attention to the situation for our members in the North.

The Atherton Tablelands are experiencing an extended extremely dry period. Good rain was received across the region until the first week of July, but since then there has been little rain to report. A lack of consistent rainfall fails our free draining soils which are usually so good for our industry.

Pasture has been extremely short and good quality hay has been very hard to source and much dearer than normal. Grain prices have risen by up to 20% due to higher input prices for the grain millers. Until new season crops come in, and assuming the weather allows large scale planting of those crops, the Far North’s situation is likely to last for at least 12 months.  Water for irrigation is lessening as stream flow decreases putting further pressure on those farmers wit access to irrigation.  Milk production volumes are dropping and costs are increasing which is putting increasing pressure on farmers and the business community from a financial and mental strength point of view.

While not drought declared the situation for the far north is far from secure.

Lion, the processor that owns the Malanda factory, has put its entire dairy and juice business up for sale. The successful purchaser is unlikely to be known for about 6 months. Lion have been proactive in advising farmers of the process that they are going through and the progress so far. DFMC, the supply co-operative that aggregates the milk from farmers for the Lion factories, has a Milk Supply Agreement with Lion that will guarantee right of supply until June 2022.  Milk from our farmers will be required regardless of the sale outcome.

The Federal Government is moving to implement a Mandatory Code of Conduct for the dairy industry. This Code must cover from farm to processor to retailer.  The retailers are saying they already must abide by the Grocery Code of Conduct—obviously, from their behaviour, the Grocery Code is not enough to ensure good behaviour. So while we represent only a small number of farmers, we are pleased that we will be able to have our voice at a consultation meeting scheduled to be held on Monday 26 November in Malanda. 

Queensland Dairyfarmers' Organisation

District Councillor for Far North Queensland James Geraghty

Mandatory codes of conduct need to include supermarkets.

Between the Drought Levy, Mandatory Code and calls for a Royal Commission, there is certainly a lot of noise in the dairy industry at the moment.

Details of when and where the consultations regarding the Mandatory Code of Conduct for the dairy industry went out last week with the final meetings to be held at the end of November.

While we wholeheartedly welcome the ACCC’s call for a mandatory code of conduct, having that code simply be between farmers and processors fails to address a key part of the problem.

 Through recent discussions with state and federal politicians, processors and dairy farmers its clear to all that we need to extend the mandatory code to cover the relationship between processors and retailers; in particular the relationship with major supermarkets.

 The call for a Royal Commission into Supermarkets is because the issues we have been talking about are not confined to the dairy industry, but extend to all perishable products including all meat, fruit and vegetables.

In recent weeks, we’ve seen reports of the tough times faced by the pork industry due to feed prices. At the end of the day the bulk of meat, fruit and vegetable sales in the domestic market are through the supermarkets which this gives the major players like Coles and Woolworths the power in any negotiations regarding pricing.

Currently supermarkets are under the Food and Grocery Code of Conduct which is voluntary not mandatory. It is hard to believe that the dairy industry is alone in taking the supermarkets to task with regards to their role.

The slow wheels of bureaucracy mean that we are unlikely to get the Royal Commission into the supermarkets passed before the new year.

QDO would like to encourage all those industry bodies that represent other agricultural and horticultural industries like National Farmers Federation to contact our Federal politicians and tell their accounts of the bullying practices of the supermarkets.

A concerted whole of agriculture approach will ensure that the Commission happens. In the meantime the mandatory code as proposed in its current format can provide some, but not all the solutions to our industry’s woes.

Queensland Dairyfarmers' Organisation

QDO President Brian Tessman.

If the supermarkets won’t help, we need the Government to implement a drought levy.

In modern society, we all suffer from information overload. According to IBM, 2.5 quintillion bytes of data are produced every day. So we can forgive the average person for their seemingly short attention span.

It is hard for people living in the currently grey and rainy coastal regions of Queensland and New South Wales to believe that we are still in drought. Meteorological drought is rarely broken in a single event or month; typically regular rainfall over a period of several months is required to remove rainfall deficiencies of the magnitude of those currently in place.

But the politicians who supported drought relief efforts 2 months ago, need to take concrete action, not just sympathise.

Unfortunately for our farmers, the cost of feed and freight and general production costs are still too high and will stay that way for months. It is not as if the small amount of rain has solved our problems, if anything, it has masked the magnitude of the issues we face.

It was 8 weeks ago that QDO called for the supermarkets to raise the 10 cent/litre drought levy. This was not a marketing stunt, though Coles and Woolworths have certainly made it into one. This levy was a very real plea to the supermarkets and to the Australian public to help those dairy farmers affected by the drought.

In every media statement put out by Coles since we called for the levy, the supermarket has quoted that it is already doing its bit with its $12 million Drought Relief program. According to the National Farmers Federation, Australia has 85,681 farms. While some farms are not in drought declared areas, I would hazard a guess that at a minimum 25% of all farms are being affected by the drought due to the costs of feed and irrigation.

Taking that number and divvying up the Coles fund, each drought affected farm would receive $560 – an embarrassingly small amount and a tokenistic gesture.

Recent calls for a Royal Commission into the predatory practices of the supermarket are welcome and we ask that this is pushed through. But we have to ask how many farms will go under by the time a Commission is done?

While QDO never wanted an official “levy” imposed by the Federal Government, the situation is now at a point where Minister Littleproud needs to consider it seriously.

Queensland Dairyfarmers' Organisation

QDO Vice President Matthew Trace

Don’t let the call for a Royal Commission into Supermarkets be in vain.

The interim report of the Royal Commission into the Australian banking sector was released last week and is evidence of long-term corporate bullying. What it also tells us is that we do have a system whereby even the most powerful companies can be brought to account for unfair practices.

While Llew O’Brien’s call for a Royal Commission into Supermarkets was made based on evidence of the underhanded tactics that Coles and Woolworths have used against the proposed 10 cent/litre Drought Levy, rumours of bullying have been around for a number of years. It doesn’t take a genius to guess that threats to reduce shelf space of branded product if private label contracts are not met, is being applied across the board.

In Australia, we have only a handful of dairy processors, all of whom rely on contracts with the big supermarket chains to remain profitable. We don’t expect the processors not to make money; they are a business as are the dairy farmers that supply to them. It is a case of ensuring everyone can have a sustainable future.

Though dairy is the only industry which has had a cap placed on its retail price for the last 7 years, it would be a surprise if other suppliers, in particular, those whose products have a finite shelf life, are not forced into unfair contractual agreements.

Now, we can only hope that firstly, the Royal Commission is approved by parliament and secondly, that all suppliers – be it meat, eggs, fruit and vegetables, dairy and even packaged goods come forward. Only with strong evidence across all sectors will the supermarkets be made accountable.

It has been over a week since O’Brien called for the Commission and as yet, nothing has come to fruition. We urge the public to push their local members – federal and state to get it enacted so we can stop the supermarkets dictating the supply chain.

Queensland Dairyfarmers' Organisation

QDO President Brian Tessmann

Royal Commission needed into supermarket pricing.

Last week, Wide Bay MP Llew O’Brien called for a Royal Commission into the predatory pricing practices of the supermarkets.

As one example of their unconscionable behaviour, O’Brien called out the recent way that Coles and Woolworths have handled QDO’s efforts to have a 10 cent/litre Drought Levy imposed on all milk.

O’Brien was quoted as saying that “Coles and Woolworths have completely bastardised” the proposal. His call was backed several other politicians, who have called the Drought Levy PR stunts pulled by Coles and Woolworths among other things a “farce”.

Currently, Coles has put the levy only on their 3L private label which has simply led shoppers to by a 1L and 2L to save them the 30 cents; that way Coles can say that consumers do not want to support the levy since sales won’t reflect this.

We can’t help but question why it took less than 72 hours for Coles and Woolworths to back down on the plastic bag ban and yet the campaign for a Drought Levy across all brands that was started seven weeks ago by QDO is still not producing a fair outcome for farmers. Customer outrage towards the duopoly’s grab for profit in the bag saga seems to outweigh any interest in developing sustainable relationships with its suppliers and their primary producers.

The major dairy processors have said they want to support our farmers with a price increase and are open to audit, but they are hamstrung in a poor game of piggy-in-the-middle. Lion Dairy and Drink has announced a 6 cents/litre increase and Norco a 5 cents/litre increase to help assist with Drought. It’s good news but even they admit that it can only be temporary unless the retail price is increased permanently to meet rising production costs.

And still there is the unanswered as to why Coles insists on paying the levy through an application process rather than distributing back through Norco who supply their private label milk.

QDO is certainly delighted that O’Brien, Littleproud and others are looking at ways to deliver practical outcomes. We need them to continue to hound the supermarkets, to vote through a Royal Commission so that it can expose the supermarkets' predatory practices towards its suppliers.

Queensland Dairyfarmers' Organisation
QDO Vice President Matthew Trace

Labor summit a good sign for the Australian dairy industry.

Last week Shadow Minister for Agriculture Joel Fitzgibbon; Senator for Queensland, Chris Ketter and Senator for Victoria, Kim Carr invited the various state and national dairy farming organisations as well as representatives from Coles and Woolworths to meet with them in Brisbane to discuss the crisis within the dairy industry.

The consensus from all organisations except for the retailers naturally, was that the mandatory code of conduct recommended by the ACCC report into the dairy industry, needed to be extended across the value chain and not be confined to the relationship between processors and farmers. The imbalance of power that has been so often quoted from the report, exists at all levels and needs to be addressed.

Representatives from the major processors were frank. As much as they want to support our farmers with a price increase, unless the real issue of current retail pricing is fixed they also see no future for their businesses.

When you have representatives from multinational corporations acknowledging their own frailty due to retail pricing, you see just how dire the situation has become.

While there is speculation as to when the next federal election is called, fixing the Australian dairy crisis needs to become a key election promise for all parties.

No government wants the collapse of an industry on their conscience. As we’ve seen from the petitioning that QDO has undertaken over the last 5 weeks, this issue is something that the Australia public believe in and are passionate about.

It was good to see Labor taking the initiative with calling the summit, but if we wait much longer or have to wait for the election to bring about change, we won’t have a dairy industry to defend.

To date, no federal government has taken real action to fix the retail pricing issues of the dairy industry. We continue to hear words of support, but words are not enough.

QDO President Brian Tessmann

Recovery and Resilience programs needed for the Downs.

It seems such a short time ago that QDO provided its first report on its Industry Recovery and Resilience Project (IRRP) funded by the Department of Agriculture and Fisheries in response to Cyclone Debbie.  

How quickly our need for an IRRP can change from cyclone damage to drought.

Funding for this program was earmarked for dairy farmers in the Scenic Rim/Lockyer Valley region. As the name suggests these projects have the scope to assist farmers in many aspects and across all stages of their business.  Improved skills in business management and how to gain finance are just a couple of ways that an IRRP aims to give in the pocket results for farmers as they face an almost never-ending cycle of weather-related disasters – not only cyclones and flooding but drought and feed shortages.

Through the workshops run in Beaudesert, Marburg and at the QDO AGM and Forum, QDO spoke with 86 farmers affected by Cyclone Debbie.

QDO project officers Torie Harrison and Damien Ferguson followed up the workshops with phone calls and one-on-one on farm session, so that almost 95% of all dairy farmers in the region were contacted and offered assistance.

A follow up survey showed that farmers needed ongoing financial analysis of their businesses; assistance with developing a business action plan to help improve the financial position of the farm and improve their resilience and preparedness for future weather or market risk.

While the Scenic Rim/Lockyer Valley have been hit with a double whammy of the cyclone followed by the drought, it is other regions, namely the Darling Downs where we need to extend this project.

QDO is seeking funding to extend the project so that those facing severe financial hardship caused by the high cost of feed and the ongoing drought conditions in regions like the Downs can also have a chance to recover.

QDO President Brian Tessmann

Why the National Farmers’ Federation should not be involved in the 10 cent / litre Drought Levy.

It is as clear as the skies above drought-stricken Australia, that Coles’ publicity stunt to put the 10-cent levy on a single line of their private label milk is a slap in the face to our farmers. Because they have not put the levy on all brands and all sizes, the amount that would come back would be a fraction of a cent.

That’s bad enough, but what makes it worse is their announcement that they would deliver the pittance that would be collected back through the NFF as opposed to using the correct protocol which would be to pay it directly to their suppliers Norco and Saputo who would then be able to simply pass it on to its members by way of their milk cheque.

The NFF have not made any public statement as to why they agreed to be Coles’ lackey but as the national advocacy body that’s supposed to represent all farmers, it makes you wonder exactly who is in control and where all our primary industry sector is heading.

This week, I was on a young QDO member’s family farm just south of Toowoomba to launch the new campaign Queensland’s dairy farmers. The Cream of Australia. We had a half dozen additional young farmers join the launch to allow the media to ask what they think of their futures in dairy.

I hate to say it, but the interviews were bleak. Not one of them could honestly say whether they would be operational in 2 years or even 12 months’ time because of the drought and the unsustainable price paid for milk. These weren’t the old farmers who are ready to hang up their boots, these were farmers in their twenties and thirties who are giving up hope.

You can talk about the responsibilities of the processors in the situation we are faced with we need to remember they are just the middleman getting equally bullied by the supermarkets.

As farmers and as consumers who shop, we need to stand up to the bullies. We need to say to Coles that we’ve had enough. 


QDO President Brian Tessmann

 

We are not amused. Customers feeling duped by the PR stunt by major supermarkets on the 10 cent/litre Dought Levy.

On Thursday last week,  Australian dairy farmers were buoyed by the announcement that Woolworths intended to introduce the 10 cent/litre Drought Levy with Coles scurrying to follow suit a few hours later.

That was until both Coles and Woolworths said that the levy would only apply to a single line. That line was their own brand 3L which is the product bought most frequently by larger struggling Aussie families across the country.

To give our dairy farmers a chance of survival, this levy that the Australian public support with over 105,000 signatures, needs to be on all sizes, all brands and applied nationally. 

It does not take a finance or marketing genius to realise that the duopoly's intention was to make the issue go away quickly; simply by announcing that at the end of the year the Drought Levy would end due to a lack of customer support. Putting the onus of this levy on those least able to support it shows how calculating our supermarkets can be. 

Coles spokesperson Martine Alpins states that "$1L milk has been an incredibly important part of reducing the cost of living for Australians"; that at the expense of an entire agricultural industry.

Fortunately, Australians are smarter than our supermarkets think. Over the weekend, Queensland Dairyfarmers' Organisation has been contacted by hundreds of shoppers incensed at the marketing ploy. 

This issue will not go away until we get the Drought Levy applied to all milks, all sizes and in all states and we urge shoppers to use their own bargaining power to choose branded milk and other supermarkets prepared to support our farmers. 

For more information, please contact Sarah on 0424 416 317.

 

$10 billion loss to the Australian dairy industry courtesy of Coles.

The Australian dairy industry is in crisis. While we do not like to scaremonger, the reality is that Queensland, much of New South Wales and probably the Western Australian dairy industries won’t be around in a few years if things stay as they are.

When Coles introduced $1-litre milk in 2011, the minimum price of milk was $1.30. For the other supermarkets to stay competitive, they followed suit and now all supermarkets stock a $1-litre line. Not only did this introduction knock 30 cents off the minimum price, the processors were forced to reduce the cost of their branded milk to stay competitive.

Factor in inflation over the last 7 years, we are talking about a 60 cent discrepancy on 2011 prices.

Based on an average volume of sold per annum of 2.55 billion litres over 7 years, this equates to a $10 billion-plus loss to the dairy industry.

It is a staggering sum and goes a long way to explain why our dairy industry is hurting so much.

QDO’s campaign for a 10 cent/litre Drought Levy has had a terrific response from the public with now over 100,000 signatures on the petition on change.org as well as the support via our social media channels. We have been receiving phone calls and emails from everyday mums and dads wanting to know what more they can do to get this 10 cent increase through. It has been truly heartening to see so many people wanting to support our industry.

We particularly want to thank the media who have continued to run the story and continue to support this week’s message: If Coles won’t support the levy, we’re asking the public not to support Coles.

The value of the media’s support cannot be understated. They have helped make something that could have been a flash-in-the-pan story into something that continues to gain momentum, two weeks in.

When QDO initiated the campaign, Prime Minister Scott Morrison said that he would support the levy, if Coles were on board.

That our newly appointed leader would say such a thing, truly demonstrates just how much power we have allowed the supermarkets to acquire.

3GB host Ben Fordham went out on a limb last week, when he interviewed QDO member Jo Bradley. For 8 ½ minutes, Ben and Jo berated supermarket giant Coles regarding their continued disinclination to support this levy.

The media will have no doubt been receiving pressure if not outright threats since Coles is one of the biggest advertisers in Australia; so we are truly appreciative of their ongoing support.

QDO President: Brian Tessmann

Coles, we are not going to back down.

QDO’s campaign for a 10 cent/litre Drought Levy has gained spectacular support from not only from the everyday Australian, but politicians and the media as well.

A few people have asked why we did not aim higher with, say, a 20 cent/litre for the Drought Levy or to petition for the permanent end to $1 litre discounted milk.

The rationale is quite simple. Since $1 litre was first introduced by Coles in 2011, the dairy industry has been scrambling to get back on its feet. Through organisations such as ours, we have been in ongoing talks with the retailers and processors to change the market situation, to no avail. As much as it pains us, we have been expecting too much from corporate fat cats who saw no reason to reevaluate a poor decision that could only lead to the demise of the Australian dairy industry.

Until this point the industry has been focussed changing things only through the processor and retailer. We had forgotten the most powerful player in the game – the consumer. The consumer is the everyday Australian who through their purchasing power, has the influence to change our industry – to make it once again sustainable.

The peition started on Monday last week, and today, the signature count reached over 72,000. The online support on social media is heartening to see but we still have Coles holding out – sighting that it is not in the best interests of their customers.

This is not just about Queensland and New South Wales; it is a nationwide campaign to alleviate the financial burden on all dairy farmers due to our ongoing drought.

It was terrific to have Parmalat (Pauls brands) and Norco step up and support the campaign. With 2 of the major procession players on board, it is now a matter of getting the supermarkets to agree.

Woolworths have said that they will take on the 10cent/litre levy if all other retailers come on board. While it is disappointing that they were unprepared to take the full leadership position it is better than its competitor Coles who firstly hid behind the ACCC report and is now hiding behind their aid campaign.QDO has no intention of letting this Drought Levy slide into the abyss. We’ve had fantastic support from our friends in the media – giving us national coverage which we thank them for.

We have a battle plan in place and we are only 7 days into that plan. If the supermarkets think that they can hide until this goes away, they’ll be hiding for a very long time.

The petition can be found on change.org by searching 10 cent Drought Levy or via this link: https://www.change.org/p/petition-coles-woolworths-for-a-10-cent-per-litre-drought-levy-on-all-milk-brands

QDO Vice President: Matthew Trace

Dairy farmers ask the Australian public to petition retailers for a 10 cent/litre Drought Levy.

Last month, Australians realised the extent of the drought crisis faced by Queensland and New South Wales farmers. While there is no doubt that all agricultural industries are hurting, the dairy industry faces a tougher challenge than most.

To produce milk, dairy cows need to be in peak health and their food quality and quantity maintained. Whereas beef cattle can be fed lower quantity and quality feed to see them through the drought.

So, the increasing scarcity and the price of freighting in fodder has hit the New South Wales and Queensland dairy industries hardest. While public support via donations to organisations such as Buy a Bale have helped many who are at their lowest, these organisations have also had a detremental effect, since those able to afford to buy it, cannot find any feed to buy for love nor money.

Also public support via donations is short lived and unsustainable.

So QDO has decided to do something about it by appealing to every day Aussies to help put pressure on the supermarkets.

The national campaign launched by QDO this weeks asks consumers to sign an online petition for supermarkets, Coles and Woolworths in particular, to increase the price on all milk by 10 cents/litre and for processors to guarantee that the full 10 cents will go back to the famers.

We ask that this increase apply not only to branded milk but also to the current $1/litre products sold.

QDO reached out to Kyogle Dairy farmer Shane Hickey whose post on being paid $2.46 per hour went viral with over 4 million views and countless shares to help drive awareness  for the campaign. While Shane is not a Queenslander, he shares our sense of injustice and our drive to turn around the dairy industry and make things happen.

For too long, we’ve hoped for the processors and supermarkets to do the right thing. Nothing has changed. So we are calling on our fellow Australians to drive change by signing and sharing the petition.

We’ve seen an outpouring of support on social media sites like Facebook where everyday Australians are rallying behind our farmers so we know we have their support, it is just finding the right way to harness it.

When we see millions of Australians supporting a 10 cent/litre Drought Levy and asking the supermarkets and processors to implement it, we will see the full power of the everyday Australian’s power and influence.

The petition can be found on change.org by searching 10 cent Drought Levy or via this link: https://www.change.org/p/petition-coles-woolworths-for-a-10-cent-per-litre-drought-levy-on-all-milk-brands

QDO President: Brian Tessmann

The wrap up on this year’s QDO AGM and Forum.

There was a good roll up of farmers and dairy industry people at this year Queensland Dairyfarmers’ Organisation’s AGM and Forum held last Wednesday at the Woodford Memorial Hall. The line-up of speakers was diverse and designed to challenge how each attendee saw the Queensland dairy industry and their own future direction in it. With Lion Dairy and Drinks the only member of the big three processors in attendance, the focus was more on how each individual farmer personally handled the tough times and when they could make real progress for their farming business and find new opportunities to expand or diversify.

There were great presentations from Kevin Stephenson from Beyond Blue who spoke from personal experience of the challenges that can face almost anyone in the mental health arena. The National Small Business Association chair Anne Nadler spoke on opportunities to diversify our market opportunities and both the processor and farmer level.  QDO EO Eric Danzi and I spoke on current industry issues including the current debate around the Voluntary vs Mandatory Code question.  We also outlined our progress and difficulties we have found in getting a market response in farm gate milk price to the huge recent increases in production costs caused by the wide spread drought. “Make it Cheaper” Relationship Manager Lucy Block explained how their organisation can save members in contestable power areas serious money on their power bills including one QDO member who has reduced their power bill by $16500 annually. There was also interesting sessions by Damien Ferguson on Financial Planning and Brett Hart on the legal issues and pit falls around farm succession planning. 

There is a lot for our members to be thinking about at the moment but it is obvious that we need to tackle the issues head on rather than hope that they will disappear. QDO would like to thank our sponsors and all those who made this forum such a great day.  

QDO President: Brian Tessmann

The Queensland dairy industry a winner at this year’s EKKA.

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This year saw the dairy exhibitors in their new home on the ground floor of the CRT pavilion at this year’s EKKA. Set between sideshow alley and the show bag pavilion, it is not surprising that visitors found their way inside to see the cows and meet the dairy farmers.

Thousands of people, largely families with small children, went through the exhibit; and did so with a purpose in mind. On Monday last week, QDO launched the consumer campaign called Queensland Dairy Farmers. The Cream of Australia. Highlighting the quality of Queensland dairy brands, the value of supporting local Queensland farmers and the tireless work done by our farmers to bring consumers the great products they know and love, the campaign is upbeat and shows the pride we have in our dairy industry.

Using the EKKA as the springboard for the campaign gave us high visibility; so with that in mind, QDO launched The Cream of Australia cutest cow of Show competition which ran from Monday to Friday.  It was a great way to invite the public to talk to the farmers, ask questions and to hear their stories directly.

Designed as an awareness driver for the campaign, this ‘people’s choice award’ also gave mum and dads a much-appreciated focus for their kids as they walked through the exhibit.

An additional bonus was that the competition gave exhibitors a chance to have some friendly rivalry and fun whilst they prepared for Friday’s judging. With unofficial voting booths being set up by several farmers it was clear that the exhibitors were enjoying the distraction as much as the public.

By the final count over 1,300 votes had been cast. But there could only be one winner which was Withawye Beauty Queen owned by the Dunne family. Minister Fentiman who officially launched the campaign last Monday was also on hand to crown Beauty Queen the winner in the main arena.

The new home of the dairy exhibitors may need to have a few kinks ironed out for next year’s EKKA but it was clear by the shear volume of people who visited and the amount of interaction the public had with farmers and cows alike, that Queensland dairy was a roaring success at this year’s EKKA.

Congratulations also to the officially judged winners at the show.

QDO Vice President: Matthew Trace

QDO's future focus to be highlighted at this year's AGM and Forum.

Queensland Dairyfarmers’ Organisation will be holding its AGM and Forum at the Woodford Memorial Hall on Wednesday the 22nd August starting at 9am. This is a good opportunity for our members to see what QDO has done in the past 12 months but also to hear what the future focus for the organisation is.

There have been significant changes to the way in which QDO’s purpose is defined which gives the organisation a clearer business structure to all current and planned programs and projects.

Some speakers are set to challenge the longstanding commitment of the Queensland dairy industry to supplying fresh milk to the Queensland market. With farm gate prices remain below a sustainable level, our members as individuals or as a coordinated whole, need to be open to other possibilities if things don’t change.

Our members would by now be aware that we took an unprecedented decision to employ a marketing and communications manager early this year. The decision was not made lightly but in response to the stark reality that advocacy alone would not influence the farm gate price given to our farmers. Other than helping QDO have greater clarity and communication with members, Sarah’s core role is to look at changing customer buying behaviors so that the retailers and processors see in their profit margins that the public wants to support our industry. Sarah will give some key background information on the campaigns that are planned.

Members who were unable to attend the Growth, Transition & Farm Progression workshops due to on farm commitments or distance will have the opportunity to hear an abridged version at the Forum. For members with multiple generations working on the farm, it is an invaluable talk about the opportunities available with farm progression, a guide to getting finance from the bank and protecting your assets against the unknown.

We would like to see as many members as possible. Please RSVP to Kerrie at the QDO office.

QDO President: Brian Tessman

Crowdfunding is not going to save farmers.

It is a particularly frustrating not having a pool of money to raid to assist individual QDO members as they struggle with the financial burdens caused by this drought. Every week QDO staff are on the phone to the Department of Agriculture and Fisheries and QRIDA to see whether more assistance can be given. Every week the answer is the same, so we understand why some farmers are just simply giving up.

The new Regional Investment Loans for Drought and Farm Investments launched on 1 July by the Federal Government will provide more low interest loan options. But given current conditions and increased costs for feed and fuel, a lot of dairy farmers can’t afford to even pay the interest on a loan. 

So, it’s not surprising that some more social media minded farmers are looking for other ways to raise capital. A farmer in Albion Park, NSW has gone on to social media to raise funds to help get him through the drought. Using the crowd funding platform gofundme.com, he has managed to raise over $250K in the last week. He’s is looking to raise $300,000 but intends to keep only a portion of this for himself. It’s a modest amount just to keep his cows fed and not unreasonable. This follows on from another NSW farmer who took to the media asking members of the public to ‘Adopt a Cow’ a few months ago.

There are well over 100 crowd funding pleas on that platform alone that relate to the plight of Australian farmers doing it tough due to drought conditions. While these two crowd funding campaigns have been modestly successful, there is no a guarantee it will work for every farmer in need. 

The sentiment from the people who have got behind the crowd funded farmer demonstrates what QDO’s recent market research into consumer buying behavior is telling us - Australians want to help support our farmers but they don’t really know how. One supporter wrote, “if you can’t get decent gates prices because of greedy retailers, this is one way we can support you.”
While crowd funding can provide a quick injection of cash to a farm, it is not a long-term solution. The only way we can have a sustainable dairy industry is by getting a fair farm gate price. 

The facts are clear. We have 386 registered dairies in Queensland and per farm, we have an average milk production of around 1.1 million litres p.a. If our farmers got 10 cents more per litre that would give them on average $100,000 back per annum. Not just a one off, but a sustained cashflow.

Currently, QDO is working with the Office of Small Business on a campaign to ask customers to support local dairy brands. This campaign is set to launch at this year’s EKKA. 
However, it is the fair farm gate price logo project that can really have a long-term impact on the Queensland dairy industry. 

This logo will be displayed on all dairy products that can demonstrate that they are truly supporting our industry by giving their farmers a fair farm gate price. On pack it will provide Queensland consumers with a very simple way of determining which brands are doing the right thing. 

QDO Vice President: Matthew Trace
 

Farm safety week a timely reminder.

Last week was Farm Safety Awareness week and this year’s theme was “Innovative, Safe and Healthy”. With all the management and financial pressures, we have these days, we need to remember that our first priority should be to make sure our families and workers are safe and healthy.

In 2016 there were 63 accidental deaths on Australian farms. That figure is a significant improvement on previous years, but still way too high. The leading causes resulting in death and serious injury were motorbikes, Quads bikes, tractors, horse riding, animals including cattle and horses and machinery especially augers and PTO shafts.

Of particular concern is the number of child deaths on farms. Around 20 children under the age of 15 die from accidents in rural Queensland and 30% of those deaths on farm are visitors. One of the biggest things we need to always keep in mind is that the farm is not just your home but also an industrial workplace. Growing up on a farm, our own children are taught the do’s and don’ts from an early age and we are always mindful of where they are, but we all need to be super vigilant when young visitors come on to the farm. The leading causes of child deaths are farm vehicles including Quads trucks and tractors and farm infrastructure such as water tanks.

At last year’s QDO AGM and Forum in Toowoomba, former Broncos and State of Origin star Shane Webcke, spoke about rural workplace issues and the incidents he had encountered growing up. Shane’s father, Tom Webcke died in a production line accident when a poorly maintained hydraulic line gave way and he was crushed. Shane said that his father’s attitude towards personal safety and care at work was also a likely contributing factor to the tragedy.

Impulsive actions have wrecked many Australian farming businesses and families when it would have only taken a few extra seconds extra to have handled the task safely.

So while we are hammered by droughts, unfair markets and low farm gate prices, let’s not make things infinitely worse by allowing our family or workforce be injured going about our work.

QDO President: Brian Tessmann

Lion to adjust its fat to protein ratio in new payment model.

Lion Dairy and Drinks announced last week that they are giving 12 months’ notice to its suppliers of a new payment model in South East Queensland and New South Wales. 

The system is to come into effect for the 2019/2020 milk season which will increase suppliers reward for butterfat and cap the reward paid on protein. This model will take effect from FY2019/2020. This would mean the fat to protein ratio goes from 1.5:1 to 1:1 in relation to its bonus system. 

Whether the adjustment is good, bad or neutral will depend on several factors, the main one being available diet. To increase the butterfat component farmers may need to adjust the type of feed they use and any changes to the make-up of feed or to the make-up of the dairy herd are expensive and often unprofitable in the short term.

South East Queensland dairy farmers are already doing it tough. While the new payment model does not come into effect till 2019, the financial flow through effect from the current drought conditions in both Queensland and New South Wales, will make it difficult for farmers to achieve current bonus levels in the short term when they are having to import basics such as silage and hay at exorbitant costs. 

Even if we had significant rain in the next six months so that we were no longer drought-declared, it will still take about 12 to 18 months to get back on track.

Without full transparency on the payment model used by all the major processors, it is difficult to evaluate this announcement fully. If Lion is simply responding to market demand for higher fat and not making it more difficult for its suppliers to get their current (or better) farm gate price, then QDO accepts the change.

We understand that the payment model is not yet set in stone so we urge members to go to DFMC or direct supplier meetings over the coming months to have their voice heard. We would also urge those members to have their income estimations reviewed to see what the change will do to the bottom line.

QDO Vice President Matthew Trace