Blueprint paves way to reset direction of dairy industry

The outlook for dairy is positive under the Australian Dairy Plan, writes John Brumby.

Bright future: Support for the initiatives of the new Dairy Plan could lead to a progressive five years for the sector, says the plan’s chairman. Picture: Zoe Phillips

THE Australian Dairy Plan was first conceived in response to one of the most challenging periods experienced by this industry.

Milk price volatility and a succession of very dry seasons had impacted farm profitability across the country, causing a significant contraction in the number of dairy farmers and the size of the national milk pool.

All parts of the supply chain recognised that collective action was needed to reset the industry’s direction, through a strategic plan designed to rebuild its profitability, confidence and unity.

The plan launched this week has real substance and, with rigorous implementation, I’m confident it can deliver the change sought by industry.

It is formed from one of the most extensive listening exercises in dairy’s history and the views of more than 1500 people who took part in nationwide consultation. It has been built from the ground up.

There are five key commitments — priority areas that farmers and others told us needed to change. These include industry reform, attracting new people and investment, a greater focus on marketing, increasing business and risk management skills and tools, and improving trust between farmers and processing companies.

The plan also highlights the crucial contribution of ongoing programs in ensuring long-term growth of the industry, in areas like R&D, policy leadership, market development and sustainability.

Despite the breadth of the Dairy Plan’s commitments, there is plenty of discussion around the topic of industry reform. From my perspective and having been present during many parts of the consultation process, the call for structural reform has been made loud and clear.

Comprising more than 20 different organisations, dairy’s current structure has too much duplication and fragmentation. This dilutes its voice and influence on the issues that matter. It will take time to get this change right and the plan sets out the need for further consultation and an industry vote as essential for successful reform.

The Dairy Plan provides a clear roadmap for continuing improvements in dairy’s outlook. Since work first began on the plan in March last year, we’ve seen welcome changes in the operating environment. Farm costs (water, feed, interest rates) are down, seasonal conditions have improved and farm gate prices are higher. The turnaround is well underway with most farmers now getting much improved reward for effort. Profit is up and volume growth is rising steadily. The key now is to lock in and enhance these gains. I am confident that if the industry sticks to the plan, gets behind it and implements its commitments and initiatives, the next five years for dairy can be very positive indeed.

John Brumby is the independent chairman of the Australian Dairy Plan

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