John Brumby outlines how the Australian Dairy Plan will increase farm profitability

Australian Dairy Plan chairman John Brumby said the dairy sector “currently speaks with a dozen different voices” which weakened its advocacy ability.

The Australian Dairy Plan, released this week, will be put to a vote next year. PHOTOGRAPHER: ZOE PHILLIPS

AUSTRALIA’s Dairy Plan aims to bring the industry’s disparate policy, advocacy, marketing, research and development groups together to so that over the next five years “more than 50 per cent of farms achieve a profit of at least $1.50 EBIT/kgMS”.

But specific details on how the Dairy Plan will boost farm profitability are yet to be outlined.

When asked how the dairy industry restructure to form a new national body would lift farmgate profits to $1.50/kgMS, Dairy Plan independent chairman John Brumby said: “processors, hungry for greater volumes, have (already) pushed up prices” and seasonal conditions had improved.

“So you’re already starting to see some significant turnaround, that’s what the data is showing, in profitability and production volumes.

“If we can continue on that track, if we can lock in, permanently, those gains, then our very detailed modelling, shows that farms will achieve those margins.

“If farmers achieve those margins, they will be wanting to produce more to make more profit and processors will be wanting to buy more to get more volume to make better use of their plant and equipment.”

“If we do the things in this plan, that are central to it, if farmers behave in a way that’s consistent with this plan, you’re going to see continuing improvements in profitability.”

But questions remain over how state-based lobby groups fit into the ‘one-stop shop’ proposal.

Mr Brumby said the Australian dairy sector “currently speaks with a dozen different voices” which weakened its advocacy ability.

“I’ve had 25 years experience in government — governments won’t take industry seriously if they are disparate and divided and won’t speak with a clear and cohesive voice,” he said.

The blueprint to form a new national body will be put to a vote next year and if successful, will be established and operational by late 2022.

The plan has received support from all state dairy lobby leaders and a number of regional chairpeople, who say the sector has needed reform since the 2016 milk price crash and subsequent clawback.

Murray Dairy chairwoman Karen Moroney said a reconfiguration of the Australian dairy industry’s structure had been necessary since the 2016 milk price collapse.

The Mitta Valley farmer, based in North East Victoria, said the sector had too many administrative and lobby elements all competing for airspace.

“Our family are fourth generation dairy farmers and my husband and I have been in dairying for the past 31 years. The four years since the 2016 milk price collapse have been the most challenging for us and I’d say for most farmers,” Mrs Moroney said.

“What we’ve seen since 2016 is that the old structures, which worked well in the past, do not work anymore. The Dairy Plan really addresses the need for greater unity. If we can work together, then the increased profitability will flow on from that.”

However, a new group is forming in southwest Victoria — Dairy Farmer Voice — which is opposed to the plan and championing their own blueprint authored by consultant Sarah Campbell.

Colac farmer Mark Billing said the consultation process co-ordinated by Mr Brumby ensured a range of voices within the sector were listened to.

“I’m from southwest Victoria, and the group that’s formed in southwest Victoria has a right to their opinions, but this Dairy Plan is the only way we can move forward as an industry,” he said. “The consultation process was thorough, everyone got to have their say, and they’ll continue to have their say as we head to a vote.”

The breakdown in the farmer-processor relationship is identified as a key problem for the sector with a target of 75 per cent of farms and processors being positive about industry set for 2025.

The most recent survey of industry sentiment painted a dismal picture — 34 per cent for farmers and 30 per cent for processors.

South Australian Dairyfarmers Association president John Hunt said consolidation of the nation’s dairy bodies would build on the progress the sector had achieved in recent years.

“We’ve achieved a lot in a short space of time — the code of conduct, multiple free trade agreements. Now we have the ACCC looking at the conduct of the supermarkets,” Mr Hunt said. “You’re always going to get the haters, there’ll be people not happy with the Dairy Plan but are the coming up with an alternative?”

Newly-appointed WA Farmers dairy council president Ian Noakes said there was broad support for the plan nationwide.

“There’s plenty of good points raised in the plan — the challenge is putting it into practice,” Mr Noakes said.

“There’s a mood for change, from Dairy Australia, from the ADF, and from the other state bodies. There’s a recognition we need to take a more united approach.”

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