Milk processors roll out 2022/23 opening prices
While opening milk offers for the 2022/23 season have been solid, they still fall short of what is needed to help the industry's economic recovery, according to dairy farmer advocacy groups.
While early opening milk price announcements have set new records, soaring input costs, skilled labour shortages, and extreme weather conditions may prove too much for some dairy farmers who find themselves lured by exceptional land values or the relative simplicity of beef production.
The Dairy Mandatory Code of Conduct requires dairy processors to publish standard form milk supply agreements for the following financial year on their websites by June 1 at 2pm.
Minimum opening milk offers for the 2022/23 season, so far.
Milk Solids (MS)
Fonterra: $8.25/kgMS
Bulla: $8.30/kgMS
ADFC: Jul-Dec $8.40/kgMS, Jan-Jun $9.20, full year average payout $8.80/kgMS
Saputo: $8.50/kgMS
Lactalis: $8.80/kgMS (northern Victoria) and $8.65/kg/MS (western Victoria and Gippsland)
Beston: $8.75/kgMS
UDC: $8.50/kgMS
Goulburn Valley Creamery: $8.50/kgMS
DFMC: $10.96/kgMS (Far North Queensland); $11.21/kgMS (south-east Queensland); $10.71/kgMS (NSW); $8.64/kgMS (southern Victoria); $8.74/kgMS (northern Victoria); $8.87/kgMS (South Australia)
Cents a litre (c/L)
Norco: 83-85c/L
DFMC: 78.24c/L (Far North Queensland); 83.09c/L (south-east Queensland); 77.7c/L (NSW)
Gloucester, NSW, dairy farmer and eastAUSmilk vice-president Graham Forbes said while some of the price rises were substantial, they were not enough to cover input costs.
"Some input costs, such as fuel, have doubled, while fertiliser has increased by 250 per cent," he said.
"The challenges for farmers shortly will be input costs, the availability of products, rising interest rates, general inflation, and instability within the economy.
"Just last week, wheat hit $500 a tonne."
Mr Forbes milks a herd of 700-odd predominantly Holstein cows and supplies Norco.
He described it as "terrible" to see milk prices still at $1.30 a litre when they were the same price in 2011.
"No industry can sustain that,' he said.
"If we don't get the price up, the whole industry suffers.
"We've been pushing for a $2 a litre minimum price in supermarkets, which I don't think is unrealistic in today's world.
"Everything else has gone up in the supermarkets; nothing else has been held at a low price for so long."
Brian Cox, Meralyn Pastoral Co., Kerry, Queensland, supplies milk to Lactalis, South Brisbane.
The third-generation dairy farmer milks 120 Holstein and Holstein/Jersey cross cows.
"I think it is still early days, and I am hopeful that the price will increase as competition for milk increases,' he said.
Mr Cox said the Dairy Mandatory Code of Conduct had been positive for farmers and provided a sense of stability.
"I would like to think it rebalances the power between processors and farmers," he said.
"As farmers, we never knew what prices other companies were offering. Now the information is general knowledge.
"The Mandatory Code has been valuable because it gives us some certainty about our options."
Mr Cox spoke of the most significant challenges facing the dairy industry in the next 12-months.
"The weather has just been horrific, and we are not set up for this type of weather in Queensland or anywhere," he said.
"One Saturday night recently, I was walking around in the mud, getting rained on, and I thought, 'I don't know if we get paid enough for this'.
"I hope it will be recognised that there might be a milk shortage again this season."
Mr Cox believes more farmers may consider exiting the industry.
"For the last 12 to 18-months, it feels like dairy farmers have been exiting to beef," Mr Cox said.
"There's also a lot of competition for land at the moment.
"Speaking from a Queensland and northern NSW perspective, we are not seeing young farmers coming through.
"I'm in my 30s, and I could count other farmers the same age on the one hand, and I don't think there would be many, if any, in their 20s."
Soaring fertiliser, fuel and grain prices are also taking their toll on farm businesses.
"We have noticed that fertiliser has been going up for the last two to three years - all our inputs seem to be going the wrong way," Mr Cox said.
"We are choosing to weigh up if there are benefits to fertilising at the current prices.
"For the last five to10 years, we have constantly been seeking efficiencies to counter increasing costs and lagging milk price; yes, the price looks like it will move, but inflation and all our expenses seem to be moving faster.
"We're working on getting better and better, and we're running out of places to look for the cheap options.
"For many farmers, it won't matter what price they are offered for their milk, they could go to a dollar, and they're not interested.
"They have already decided they are exiting, so it is too little too late."
The latest Dairy Australia Situation and Outlook report has indicated that after successive seasons of recovering profitability, the net effect of rising fertiliser, fuel and grain costs on margins amid the conflict in Ukraine and ongoing COVID-19 disruptions is a crucial question as farmers and processors try to plan in a volatile market.
Dairy Australia's industry insights and analysis manager, John Droppert, said ongoing growth limitations and heightened margin risk are expected to offset good milk prices and favourable seasonal conditions, resulting in a comparatively flat milk pool totalling 8.6 billion litres nationally.
"The 2022/23 season will be marked by rising numbers throughout the supply chain - from production costs to farmgate prices, from commodity values to food expenditure," Mr Droppert said.
"Meanwhile, labour shortages remain a significant constraint, while high beef prices and soaring land values have enticed farmers and farmland away from dairy."
Australian Dairy Farmers call for milk price transparency
Higher retail prices for dairy are critical for the viability of the sector, the president of Australian Dairy Farmers says.
Rick Gladigau has welcomed yesterday’s record opening prices, with some processors breaking through the $9/kg of milk solids ceiling.
However, the ADF president said skyrocketing fodder, fuel, fertiliser and electricity prices were eating into the margins of most primary producers.
“Clearly there is strong competition from processors in the market, which is fantastic for dairy farmers,” Mr Gladigau said.
“Choice is important and we can see that the dairy code is operating as intended.
“ADF recognises that these opening prices are strong, and we believe there is potential for more increases due to limited milk supply to meet existing contracts both domestic and international.”
The Australian Energy Regulator last week announced average wholesale electricity prices had “at least doubled” in the first three months of this year, with wholesale electricity costs in Victoria set to rise 12 per cent for residential customers, and 10 per cent for small businesses.
“Dairy farmers are still under significant pressure given the drastic increases in the cost of feed, fuel, fertiliser and energy. Consequently, the need for movement in retail prices is critical,” Mr Gladigau said.
“While we continue to see some farmers make a business decision to exit the industry for differing reasons we also expect that this uplift in opening prices will help some farmers confidence to continue to invest into their farms.”
EastAUSmilk co-chief executive Eric Danzi this week urged farmers to closely examine the fine print of milk supply agreements, a sentiment Mr Gladigau echoed.
“We encourage farmers to get income estimations from processors to help them decide which is the best option for their farm,” Mr Gladigau said.
“The quoted opening price may not be the price farmers will receive due to many different factors.
“We’ll be working with the new Labor government to deliver on our election platform, much of which seeks to drive profitability and sustainability through the Australian dairy industry, including even more transparency of prices across the dairy supply chain.”
Dairy Australia situation report: Inflation chasing farmgate profits
Profitability in the dairy sector would be soaring if it wasn’t for a multitude of inflationary pressures, a new report confirms.
Record prices for dairy are being chased by galloping inflation as the clock ticks down to the start of the new season.
Released Wednesday, Dairy Australia’s latest situation and outlook report reveals fertiliser and fodder costs will continue to stalk the sector into the new financial year.
Early announcements of opening milk prices have set new records with two of Australia’s big three processors opening with prices above $8 per kg milk solids.
However, Dairy Australia analysis manager John Droppert said fertiliser, fuel and grain prices were surging on the back of export logistical blockages in Asia as well as flow-on effects from the Russia-Ukraine war.
“Labour shortages are also a big factor in business planning for farmers, not just dairy farmers,” Mr Droppert said.
“Anecdotally, farmers who may in normal circumstances plan to expand their operations aren’t able to due to the shortage of workers. But they may be making smaller-scale investments and upgrades to their farms.”
Fodder prices continue to eat into the profit margins of dairy farmers, with Queensland producers hit particularly hard.
Statistics provided by the Australian Fodder Industry Association to Dairy Australia showed the Atherton Tablelands had some of the highest fodder costs with an average of $350 a tonne for pasture hay.
The fire-ravaged Bega Valley also had heightened hay costs at an average of $285/tonne for cereal hay, although the fodder costs had eased in recent months.
“Fodder and fertiliser costs have placed pressure on many farmers in the past year,” Mr Droppert said.
“Obviously, depending on which region you’re farming in, supply has an impact and that flows onto the average costs.”
Results from this year’s National Dairy Farmer Survey were included in the report.
The survey confirmed that profitability continued to improve this financial year, with 88 per cent of survey respondents reporting an operating profit in the 2020-21 season, and 90 per cent expecting to do so in the 2021-22 financial year.
Mr Droppert said 82 per cent of Australian dairy farmers were confident about the future of their own businesses while 68 per cent of respondents were feeling optimistic about the industry’s overall trajectory.
Nationwide, 700 farmers participated in the survey covering the eight dairy regions.
“Farmer confidence is at its highest level since 2015 and there was little variation by region in terms of confidence — it was across the board. Although clearly northern NSW and southern Queensland have endured several testing months following the floods,” Mr Droppert said.
“Strong prices this season and the record opening prices for the coming season provided a big confidence boost.”
Lactalis provides opening prices, Saputo silent ahead of dairy season start
Lactalis is the latest processor to provide its opening prices but one big player is staying silent on the sidelines
Opening prices are edging closer to $9 per kilogram milk solids as competition for suppliers heats up ahead of the mandatory dairy code of conduct deadline next week.
Lactalis is the latest processor to provide its pricing start to the season, with an average weighted price of $8.80 per kg milk solids for northern Victoria.
Under its flat milk payment system, Lactalis is offering $8.65 per kg milk solids to existing and potential suppliers in western Victoria, Gippsland and Tasmania.
Meanwhile, a seasonal price of $8.50 per kg milk solids is being offered as well in western Victoria and Gippsland.
Lactalis national milk supply manager Paul Lorimer did not rule out changes to pricing as the clock ticks down to the June 1 deadline, set out by the federal government’s code of conduct.
“We recognise that milk is in high demand and we will monitor price developments over the coming weeks to ensure we remain competitive,” Mr Lorimer said.
Lactalis recently acquired the Jalna yoghurt brand, which operates a Melbourne processing plant with 90 employees.
“(Jalna) is a great business and a strong brand and (the acquisition) will provide new growth potential. We are seeking additional milk to support this growth,” Mr Lorimer said.
Out of Australia’s big three processors, Saputo is the only major player not to provide an opening price with less than a fortnight to go before the code deadline.
Saputo management have been contacted by The Weekly Times for comment.
Earlier this month, Fonterra opened with an weighted average farmgate milk price of $8.25 per kg milk solids for the 2022-23 season.
Bulla was the first processor out of the 2022-23 starting blocks, confirming in March an opening price of $7.40 to $8.00 per kg milk solids.
Bega was the second processor to join the fray last month with an opening milk price in the range of $8.20 to $8.60 per kg milk solids.
Australian dairy sector experiencing a chronic shortage of labour
ADF president Rick Gladigau has described dairy's labour shortage situation as "desperate".
Politicians are again being reminded that labour shortages must stay high on the agenda post this weekend's federal election.
Australian Dairy Farmers (ADF) president Rick Gladigau said as in many other sectors in the Australian economy, dairy was experiencing a chronic shortage of labour as a consequence of the full employment rate and the slow opening of international borders post COVID-19.
Mr Gladigau described the situation as "desperate".
"Although exacerbated by COVID-19, this is not a new challenge and while we have made progress in advocating for an improved labour strategy and policy over the past 18 months, labour needs to be a priority for any incoming government," he said.
"In particular we need to see the ALP increase its offering to Australian dairy farmers and the wider dairy industry. In the final days leading up to the election, we remain unclear how an Albanese-led government will assist."
Mr Gladigau said there were still levers available that would further assist dairy farmers' day-to-day labour challenges.
He backed a call from Seniors Australia to exempt employment income from the age pension means test to boost workforce participation.
"The current means testing for the age pension discourages many older Australians from working," he said.
"Exempting work income from means testing means pensioners can return to work, and help meet critical labour shortages across dairy, and many other industries."
Deloitte Access Economics estimate that a 5 per cent increase in workforce participation from Australians over 55 would result in a $47.9 billion increase to GDP.
"Dairy regions have retirees, many who wish to work; however, are not incentivised to do so due to the means test," Mr Gladigau said.
"With many retirees already residing in dairying regions, some of the current accommodation challenges are mitigated with this proposal.
"It would be another proactive step in overcoming this labour hurdle.
"Dairy would welcome the opportunity to work with Seniors Australia and run a trial using our industry as a test case, as we need workers today."
Mr Gladigau said the government's National Agricultural Workforce Strategy and $30 million implementation commitment in the 2021 budget was a good start to addressing the sectoral challenge, but further investment was needed.
"At least $300 million would enable the establishment of a large-scale workforce capability fund to resolve worker shortages and build capabilities needed for the future," he said.
Mr Gladigau also cited progress in the last 18 months as including the review of ANZSCO (the Australian and New Zealand Standard Classification of Occupations) and upgrade of occupations and skills on a dairy farm, as well as updates to the Dairy Industry Labour Agreement which makes it easier for farmers to source staff from overseas.
"We have several members who currently have applications lodged, and with the easing of COVID-19 travel restrictions, it is hoped application processing times are prioritised and this option becomes more viable for an increasing number of dairy farmers," he said.
The Agriculture Visa was another significant step forward according to Mr Gladigau, and while it had been designed and was ready for trial, there had been some difficulties commencing this trial, although Vietnam has now signed up its support.
"Ensuring this visa is working efficiently is a top priority for the dairy sector, as we've specific skills shortages in areas such as AI technicians, which international jobseekers could help address," he said.
Mr Gladigau said despite these wins, ADF would continue to push for further support.
"Our successful launch of the national Pathway for People in Dairy and the Dairy Passport, supported by securing a $715,000 grant from the Victorian government as part of the government's $50 million Agriculture Workforce Plan, demonstrates the value of both our NFF membership, and direct lobbying," he said.
ADF chief executive David Inall said labour shortages were being amplified by increased pressure in the housing market.
Rental prices have surged, and housing prices are growing steadily.
Dairy regions are often sought after for sea or tree-change destinations, meaning housing accessibility is especially constrained for dairy workers.
"To help alleviate these issues, ADF welcomes government investment for building dairy capabilities and increasing housing initiatives for regional areas - especially those that can deliver medium-density options which is the most underserved type of housing for dairy regions," Mr Inall said.
Source: The Land, 19 May 2022
Global Dairy Trade: Farmer Power’s Garry Kerr calls for strong opening prices
As global prices slip for the fifth week, Farmer Power’s Garry Kerr says processors shouldn’t hide behind international trade ahead of the June 1 deadline.
A drop in international dairy trade should not be used by processors as an excuse to keep opening prices low, a farm lobby leader says.
Commodity prices continued on a downward trajectory in the latest Global Dairy Trade auction held overnight on Tuesday, albeit not as dramatically as a fortnight ago.
The GDT headline figure dropped 2.9 per cent to sit at $US4432 ($A6306) with the whole milk powder category falling even further — a drop of 4.9 per cent to $US3934 ($A5598).
Farmer Power chief executive Garry Kerr said given milk supply was tightening nationwide, the latest GDT figures were not the whole picture.
“We’ve had floods in Queensland and NSW. The dairy farmers there are still trying to get back on their feet. Input costs are at record highs,” he said.
“We’re looking at prices of $8.50 (per kg milk solids) roughly at the moment. That’s a start but it needs to get up to $9, otherwise you’re going to see more dairy farmers leave the industry and who could blame them?”
Last week, Fonterra opened with an weighted average farmgate milk price of $8.25 per kg milk solids for the 2022-23 season.
Bulla was the first processor out of the 2022-23 starting blocks, confirming in March an opening price of $7.40 to $8.00 per kg milk solids.
Bega was the second processor to join the fray last month with an opening milk price in the range of $8.20 to $8.60 per kg milk solids.
All processors have until June 1 to make their opening prices public as part of the mandatory dairy code of conduct.
Mr Kerr noted while meat, fruit and vegetables had all risen in retail price in the past month, milk prices were static.
“The price of the supermarket branded milk is being kept artificially low,” he said.
“There’s been a real lack of discussion about the future of the dairy industry in this election campaign. I bet you if Labor gets in on Saturday, the Coalition will blame them for the coming dairy crisis and if the Coalition is re-elected, Labor will have a go at them for being asleep about dairy. The truth is both sides haven’t addressed the problem.”
MAY 4: FIGURES DECLINE ONLY WEEKS AHEAD OF OPENING PRICES
A key index for international dairy trade posted its steepest decline this calendar year — just as Australia’s milk processors are working to determine opening prices.
The Global Dairy Trade headline figure decline plunged 8.5 per cent overnight, the fourth and most substantial drop for 2022.
The biggest drop was in the butter category, which fell 12.5 per cent to an average $US5807 ($A8176) per megatonne.
Butter has endured a cumulative drop of more than $US1200/MT ($A1690), from a record high of $US7048/MT ($A9924) in early March trade.
Whole milk powder fell 6.5 per cent, on the back of a 4.4 per cent decline in the previous event, to an average $US3916/MT ($A5514).
The whole milk index has now dropped $US841/MT ($A1184) since also reaching a record high of $US4757/MT ($A6698) at the start of last month.
The international trade figures are still far higher than this time last year but occur at a critical time for the Australian dairy sector with processors required to publish their opening prices for the 2022-23 season on June 1.
Over the Tasman where the GDT index also plays a role at the farmgate, NZX senior analyst Amy Castleton said while a drop was expected, the magnitude of the decline was surprising.
“It seems buyers have finally decided they’ve had enough of high prices,” she said.
Westpac acting chief economist Michael Gordon offered some consolation for dairy farmers ahead of the new season.
“Looking beyond the next few auctions, we expect prices to remain high on strong market fundamentals,” he said.
“However, there is uncertainty around when China’s Omicron wave passes and in turn when Chinese dairy demand recovers.”
Dairy farmers ‘squeezed on milk prices’
Dairy farmers say they are being sent to the wall over milk prices, as one NSW farmer prepares to walk away from the industry because of increasing costs.
Six weeks ago third-generation dairy farmer Alan Henry made a big decision to start breeding his herd with beef cattle as he prepares to close the 99-year-old dairy his grandfather started.
Mr Henry, who has been milking at his Numbaa property on the NSW south coast for 40 years, says he is being sent to the wall by the supermarkets.
"We don't set the price, we get told our price.
"We're slogging it out and going backwards.
"The three big supermarkets in Australia have got too much power."
He wants the price of milk increased to $2 a litre, and for farmers to be paid $1.25 of that.
The milk price has increased in the past three years, according to industry group Dairy Australia, and with it the amount farmers are getting paid.
But for Mr Henry production is down 25 per cent due to recent flooding, while his input costs have gone up threefold in three years.
He concedes he will receive $50,000 in flood grants from the processor he supplies to, but says that won't cover his losses.
Sue Boyd, who runs the dairy next door, employs 35 people and is also feeling the squeeze.
"For years we've had to borrow more money to keep going," she says.
"It's always about the consumers and the wage earners, but everyone deserves to be paid properly."
In the four months to April, 1400mm - more than three times the average rainfall - fell at her property near Nowra. With everything waterlogged, milk production is down by 25 per cent.
"It's terrible for the cows,'' Ms Boyd says.
"They're much more likely to get mastitis from the amount of mud and water, and it makes their feet really sore."
While she concedes she is getting the highest milk prices she's ever got, Ms Boyd wants prices increased by at least 50 per cent, to make up for years of low prices.
But things have improved for most dairy farmers since a mandatory dairy code came into effect in 2020, says National Farmers Federation senior economist Ash Salardini.
The code followed the ACCC's 2018 inquiry into milk pricing, examining farmers' concerns over transparency on contract and pricing practices.
"Farmers feel like they're being squeezed ... regardless of what the input cost is, regardless of what the demand is, the retail price stays relative constant," Mr Salardini says.
"The mandatory code has helped."
But he says the retail price of drinking milk hasn't budged in the past 10 to 12 years.
"It's stayed in and around a dollar,'' Mr Salardini says.
"It was $1 a litre in 2010-11 and it's $1.30 now, but when you adjust it for inflation the price has probably come down."
He says collectively the big three supermarkets control more than 80 per cent of the market, and that they still dictate prices.
Australian Dairy Farmers president Rick Gladigau says farmers have been saying for years milk is too cheap.
The South Australian farmer says while other commodities have been going up, milk has not.
"It's back to saying to consumers if you want the good Australian-produced quality product, then sorry but you might just have to pay more," Mr Gladigau says.
But while he would welcome a price rise for milk, he concedes farmers also need to look at their own operations.
"Farmers have to look at how efficient they still are,'' Mr Gladigau says.
"There's no point in saying our processors need to pay more, if they can't get it out of the market themselves."
He says the supermarkets baulk at putting the prices up.
"I reckon they feel there will be kickback from consumers by putting up the price of milk,'' Mr Gladigau says.
"It's considered a staple ... but we've seen bread go up when the price of grain goes up."
On the north coast of NSW dairy farmer Paul Weir, who lost more than half his herd in the floods nine weeks ago, has only just begun milking at his dairy again.
The floods all but wiped out his operation, and he calculated fertiliser, fuel and feed this year would cost him an extra $200,000.
He is one of 281 NSW and Queensland farmers to receive an extra five cents a litre for the next two months from the Norco co-operative, to compensate for the flooding.
"That certainly helps,'' Mr Weir says.
"Is it enough? No it's not ... but it's the first of hopefully many."
It takes the average price per litre of milk paid by Norco to about 84 cents.
Woolworths was the only supermarket to reply to AAP's questions.
A spokesperson says farmgate prices are at record highs and that they have accepted millions of dollars in wholesale cost increases from their milk processors in recent years.
"We offer our customers a wide range of milk at different prices to suit household budgets and we are particularly mindful of cost-of-living pressures for Australian families," the spokesperson says.
"The ACCC has noted that retail pricing strategies are unlikely to have a direct impact on the prices paid to farmers, which are set by milk processors.
"In the last 12 months, our Dairy Innovation Fund has provided more than $2 million in grants to 24 Australian dairy farmers to support on-farm projects which enhance resilience, efficiency and profitability."
Mr Henry says he will decide on July 1, when the new price is set with the processor he supplies to, whether to walk away from the industry.
"All I want is an honest day's pay for an honest day's work," he says.
"Anybody you talk to in the street says they're quite willing to pay more for milk, on one condition, that it goes straight to the farmer."
Littleproud, Collins fail to outline vision for Australian dairy
Dairy leaders are calling for federal policy-setters to outline their vision for the sector, but none have been forthcoming.
Australia’s dairy industry has been overlooked by the two politicians aiming to set the nation’s agricultural agenda, as the 2022 election campaign enters the final fortnight.
Federal Agriculture Minister David Littleproud and opposition agriculture spokeswoman Julie Collins were asked by The Weekly Times to outline their plans for dairy over the next three years. Both failed to respond.
United Dairyfarmers of Victoria vice president Mark Billing said the lack of vision from Canberra over dairy was “just not good enough”.
“There was a lot of goodwill for dairy through the past two years of Covid. We kept the milk flowing from the farm to the factory to the supermarket, despite all the challenges,” he said.
“Australians really took notice of the value of not just dairy, but agriculture as a whole and take these things less for granted than perhaps they once did.”
Mr Billing identified increased input costs and labour shortages as key concerns for the sector, which will necessitate higher retail prices.
He said biosecurity and support for flooded farms in northern NSW were also simple funding announcements were a federal government can make a real difference.
Prime Minister Scott Morrison inspected Norco’s Lismore factory shortly after the northern NSW floods in March but follow up funding is yet to be announced by the PM nor Opposition Leader Anthony Albanese.
“We see a lot of attention with bushfires but the floods have really hit a lot of farmers hard. They shouldn’t be forgotten about just because they’re out of the news,” Mr Billing said.
Mr Littleproud has previously promoted the benefits of the mandatory dairy code of conduct but offered little new Coalition policy for the sector, which has faced more than a quarter of its farmers leave the sector in the past five years.
Ms Collins was asked last month whether Labor planned to re-regulate the dairy industry.
“We’ve been talking to dairy farmers, and we’ll be making announcements about what we want to do in the coming weeks.” Ms Collins told ABC radio in early April.
No announcement has occurred in the past six weeks since the interview.
Pay rates for dairy employees just the tip of the iceberg as labour shortage sees milk pool shrink
DAIRY JOBS DESPERATION: Attracting labour is now the number one challenge for the Australian dairy industry, leaders say.
Dairy farmers are so desperate to attract the right people to milk cows and manage farms, they're paying well above award rates and poaching employees from each other but labour is in such short supply, many are simply burning out.
Labour availability is among the top reasons why the milk pool continues to shrink, according to dairy industry leaders like NSW Farmers Dairy Committee president Colin Thompson.
"Farms have closed down because they just cannot get staff to operate the dairy," he said.
United Dairyfarmers of Victoria president Paul Mumford said, "labour is the thing everyone talks about wherever I go," and vice president Mark Billing, who farms near Colac, said farmer confidence had dipped in the face of rising input costs and labour shortages.
"I think until the labour thing is fixed, and I'm not sure how long it's going to take and whether it ever will be, there's a lot of farmers out there as I said before that are pretty tired and don't want to milk more cows."
South-west Victorian farmer and Australian Dairy Farmers director Ben Bennett was even more direct.
"Dairy farmers can't get the labour they need to be able to have enough time off and it's taking a toll," Mr Bennett said.
"A lot of dairy farmers are breaking down physically and emotionally in their 50s - they're not making it to retirement because they just can't do it any more.
"We are naturally drawn towards intensifying the system to make it more productive when we need to simplify so it can be manageable."
While there's no national count of just how many roles need to be filled in the dairy industry, a survey by the Tasmanian Farmers and Graziers Association, DairyTAS and the Tasmanian Government about 12 months ago showed there were about 700 vacancies in that state alone.
Australian Dairy Farmers policy and strategy director Craig Hough pointed to the Dairy Australia Power of People of Dairy Survey, which was last published in 2020 before the pandemic.
It found:
47 per cent of farmers had recruited staff in the previous 12 months
70pc said it is difficult to recruit staff
93pc are filling roles within three months
47pc did not use labour agreements to fill roles
Competition for labour had since become fierce, both within the dairy industry and from other industries. Farmers with average-sized herds were paying relief milkers $250 to bring the cows in, milk, clean up and go home, Mr Billing said.
"There's a bit of poaching going on between businesses, it's become such a competitive market," he said.
"We're competing with the Australian Lamb Company and Bulla as far as staff goes, and the casual rates are getting up towards $40 an an hour and you can get $35 an hour just putting a stick into an ice cream."
The award rates are well publicised on Dairy Australia website, The People In Dairy, which shows even the lowest skilled casual farm hand must earn at least $25.41 an hour.
But advisors like Grow Dairy HR's Rachel Finch, Dairy Jobs' Anna Hazewinkel or GDM Agricultural Consulting's Gerard Murphy, all say most farmers are paying well above the minimum.
Mr Murphy, who consults in Gippsland, said all of his clients paid over the award rate.
"I think it's too competitive out there to stick to the award," he said.
Just how much higher than the award, Mr Murphy said, depended on the worker's experience and how well the prospective employer knew them.
It was the same for Ms Hazewinkel, who said her clients routinely paid about 10 per cent above the award rate and sometimes more.
"For instance, I'm actually working with a dairy in Gippsland offering their dairy farm manager anywhere from $80,000 to $120,000, depending on skills and experience," she said.
Of course, it's not all about money, with the standard of staff amenities playing a big role in attracting employees.
"Accommodation is a big drawcard," Ms Finch said.
"There's all sorts of different things farmers can help with, like transport."
One of them is on-farm accommodation.
"Accommodation is quite a big factor because sometimes farms are quite a way away from towns and people need to start early, like 3am, 4 or 5am starts," Ms Hazewinkel said.
But farmers were often hesitant to offer accommodation, Mr Murphy said, even if there was a spare house on the property.
"Supplying housing does make a difference but it's a dual-edged sword that can bring with it some other questions or anxieties," he said.
"Even before you employ someone, you're putting them into a house that you own and it takes a fair bit of trust to go there.
"As we see with house prices in regional areas, even an old farmhouse these days is worth a fair bit of money."
Aside from the pay rates and side benefits like housing or transport, all three consultants said the intangibles like hours, training and the relationship between employee and employer was crucial.
"Even if you're paying above award, that doesn't mean that you can expect someone to work 60 or 70 hours for you," Ms Hazewinkel said.
She said it was important to have a conversation early about average hours and the maximum anyone could be expected to work during peak times like calving.
"Just because you're a dairy farm owner and you do 80 hours a week, you can't expect your employees to do that, too; it's not their farm," she said.
Taking their cue from corporate employers, Ms Hazewinkel said, some dairy farmers even offer employee assistance programs that allow 24/7 access to counselling.
The best employers also had good people skills.
"I've had employees come back to me saying, 'There is no way I can work on a farm where I am sworn out or where the owner swears at other people on the farm," Ms Hazewinkel said.
Murray Dairy communication and engagement officer Melva Tyson said a local farmer who knew his neighbours were paying employees more was nonetheless renowned for retaining good staff.
"He was talking to me about just ensuring that you're dealing with the whole person and, when you're bringing staff on, induct them really well," Ms Tyson said.
"He set the standard very solidly at the very beginning and really ensures the staff feel valued all along, so he was just talking about even a simple 'thank you'.
"He talks highly of his staff and when problems occur, he's more likely to say, 'It's because of me', so perhaps training hasn't gone well, he doesn't send blame elsewhere."
Nowra dairy farmer asks Prime Minister to ease ag squeeze
A NSW dairy farmer has taken his concerns over the future of the sector directly to the Prime Minister as the 2022 election campaign enters its final fortnight.
Nowra farmer Tim Cochrane met with Scott Morrison recently as the Prime Minister toured the ultra-marginal seat of Gilmore, held by Labor MP Fiona Phillips on a 2.2 per cent margin.
Mr Cochrane told the Prime Minister dairy farmers nationwide were under considerable financial pressure due to rising input costs.
The farmer told the PM supermarkets needed to immediately raise the price of milk to cover the fertiliser, labour and electricity price hike.
“There’s plenty of talk of record farmgate prices. Well there’s record input costs too,” Mr Cochrane said.
“We’ve tried to meet with the Prime Minister a couple of times and so it was good that (Gilmore Liberal candidate) Andrew Constance organised the meeting.
“We told him the supermarkets needed to raise the price of milk. Everything else is going up: fruit, veg, other groceries. But milk just stays the same as it always was.
“The price (of generic milk) before the dollar a litre cut (in January 2011) was $1.30 a litre and what’s the price in 2022? $1.30 a litre. It’s not sustainable.”
Mr Cochrane operates a 1000-cow farm on the Shoalhaven Flats, near Nowra. The Prime Minister has campaigned in Gilmore several times and Mr Cochrane said he would welcome clearer dairy policy direction from both parties before polling day.
United Dairyfarmers of Victoria vice president Mark Billing told The Weekly Times this week said the lack of vision from Canberra over dairy was “just not good enough”.
The view was shared by the Nowra farmer.
“(Mr Morrison) told us that (Agriculture Minister) David Littleproud was looking into it but it would be good to see some more pressure from government, particularly with the supermarkets,” Mr Cochrane said.
“It’d also be good to get dairy policy from Labor too. There’s huge issues for dairy, not just here, not just NSW. It’s right along the eastern seaboard.”
United Dairyfarmers of Victoria conference: Retail plan voted down
A retail price point plan to ease the squeeze on the dairy sector has been voted down at the United Dairyfarmers of Victoria conference today.
Spearheaded by former Woolworths chairman John Dahlsen, a group supportive of the Dahlsen Plan presented the blueprint to a vote by UDV members this morning.
South-west Victorian farmer Bruce Knowles told delegates the plan was backed by former World Trade Organisation director Gary Sampson as well as retail veteran Mr Dahlsen and deserved proper consideration.
“As an organisation, (the UDV) have been stuck in a rut for some time,” he said.
“Dairy is under pressure and the Dahlsen Plan is a positive way of providing some stability for the sector.”
Gippsland dairy farmer Ken Lawrence led the charge against the initiative and claimed the Dahlsen Plan lacked detail.
“While we’d all love 20 cents a litre extra for our milk, I don’t believe it’s workable,” he said.
In 2020, Mr Dahlsen released a 107-page report detailing how Australian milk prices were exceedingly low compared to other developed nations.
The blueprint outlines how a government-mandated levy could inject much needed price stability into the sector while having little impact on Australian consumers.
The report specifies that a 20-cent levy on every litre of milk on supermarket shelves – fresh white through to UHT and flavoured – would return 6.7 cents-a-litre to each dairy farm.
A 30-cent levy would 10 cents-a-litre to the farmgate while a 40 cent levy would have a flow-on effect of 13.3 cents-a-litre.
Meanwhile, Victorian Farmers Federation president Emma Germano gave an impassioned address to the conference, urging greater participation from primary producers in advocacy.
She remarked on the lack of younger farmers representing the sector — calling on those aged 35 or younger to stand. Only two people in the function room stood.
“I can be the best cauliflower grower, you can be the best dairy farmer,” she said.
“But when people who make decisions (ministers), it makes it really easy for them to make their own decision when they get four different views.
“That means you’ve got a licence to choose whatever the government would like the policy to be. You can’t have two per cent of the industry saying it’s representative of everyone else.”
In other UDV resolutions, electors also voted down a move to reduce the number of UDV regions from four to three in northern Victoria due to a drop in farm numbers in recent years.
However, a motion to call on the Australian Dairy Farmers board to release presidential and consultancy reports was given the green light by delegates.
South-west Victorian farmer Bernie Free successfully called for the release of reports by state dairy presidents as well as an Ernst and Young consultancy report on the restructure of the sector.
“I think it’s fair that given dairy farmers paid for those reports, they are entitled to see the contents of those reports,” Mr Free said.
Long road to recovery for dairy farmers after NSW and Queensland floods
Flooding across NSW and Queensland, like other disasters from recent years, have highlighted challenges facing the dairy industry.
Increasing instances of fire, drought and flooding could see insurance premiums rise to untenable levels for some farmers. These risks need to be addressed in a long-term manner, as implications carry on long after acute events.
Dairy farmers across NSW and south-east Queensland face a long road to recovery.
Almost three years of stress from fires, drought, and pandemic-related workforce issues have affected farmers in all industries across Australia.
The recent floods have added to this pressure, placing enormous mental and financial strain on farmers.
At least 290 farms have been affected. Accounts of damage and losses include 200-head herds wiped out, infrastructure and machinery swept away by floodwater, kilometres of fencing ripped from the earth - with winter crops, fertiliser and fodder being collateral damage.
Stories of heroism abound, of farmers working tirelessly to rescue people and livestock.
In the aftermath though, it is keeping herds fed that is proving to be a daily challenge.
There has been a significant toll on animal health, with conditions such as lameness and mastitis becoming prevalent.
Exhausted, distressed and undernourished, cows that would usually produce 20-30 litres daily are giving barely a trickle.
Cold, wet weather has scythed its way through calf populations.
Rescuing heifers and cows sunk deep in mud is a daily event. Costs are likely to be in the range of hundreds of millions.
Many farms are not only experiencing stock feed issues but fuel shortages, power, phone and internet outages.
Farmer welfare and mental health is a huge concern.
After prolonged strain, there is a real risk of farmers leaving the industry.
Now, more than ever, our beloved northern industry needs to know that we 'have its back'.
Various government assistance has been announced, which Australian Dairy Farmers will continue to advocate for.
Our priority is ensuring farmers have the support they need to get back on their feet, as they navigate the long tail of mental hardship, cow health issues and financial strain that has followed these floods.
A hotline has been set up for farmers to request emergency fodder, aerial surveillance and veterinary assistance. Emergency fodder distribution centres have been set up in Casino, Alstonville, Grafton and Coraki. Reimbursement for emergency fodder freight has been made available by the Rural Assistance Authority. Need for Feed, a volunteer service coordinated by Lions International, is also delivering fodder to affected famers.
Any rise in prices for dairy foods on retail shelves at this time may likely be a necessity for ensuring dairy farmers make it through these challenges and stay on their land with their mental health intact.
Moving forward, we recognise that insurance will be a challenge. Not just for those recently affected, but for our entire industry.
Australian Dairy Farmers are working on this issue with representatives from the insurance industry.
At meetings of the National Coordination Mechanism, attended by the Hon Bridget McKenzie, Minister for Emergency Management and National Recovery and Resilience, and the Director General of Emergency Management Australia, Joe Buffone, Australian Dairy Farmers has represented the national dairy industry's interests.
If retail prices for dairy products increase, one of the reasons will be the floods.
If this happens, please tell everyone that the increase is an absolutely necessity to ensure flood-affected farmers survive this disaster.
Source: Heath Cook, ADF Deputy President, The Land, 5 May 2022
Ground is shifting on bobby calves: Dairy Australia’s David Nation
THE ground is shifting on what society will accept from milk producers in terms of where their bobby calves go. Promises are coming from all dairy nations.
Ireland's calf welfare charter guarantees no healthy calf euthanasia; in Denmark there will be no euthanasia by 2022, in the United Kingdom the same from 2023 and in New Zealand the promise is all calves will enter the market from June 2023.
For that reason, a shared future with beef is now a big part of a sustainable dairy business, according to David Nation, the managing director of the sector's big service provider Dairy Australia.
Speaking at the Australian Wagyu Association's annual conference in Melbourne, Mr Nation said the forces at play driving the two livestock sectors together were real.
"We have a challenge with our calf pathways and there is firm commitment by the whole industry, worldwide, to make change," he said.
As many as 60 per cent of future calves on dairies will be dairy beef and it will be expected they have a viable path forward, profitable for every farmer along the supply chain, Mr Nation said.
While it was expected Australia's dairy herd would be entirely bred from sexed semen within the next two years, that wasn't the answer. Surplus calves will still need a viable pathway.
Mr Nation presented a breakdown of where Australia's surplus dairy calves go now which showed 9pc were unviable and a very large portion were slaughtered as calves.
"We have to shrink that 9pc wedge and there is big opportunity in shifting that slaughtered wedge. We are continually working on genetic improvement for calf vitality and survival and improved management on-farm but the key is to grow that dairy-beef sector."
Data shows that bobby calf slaughter goes down as the Eastern Young Cattle Indicator goes up but Mr Nation said that was a 'mirage'.
"When you're making a decision of whether or not to keep a dairy calf based on the current EYCI price, you're out of sync by two years. It's not working so we have to move away from that," he said.
The answer was in relationships and partnerships with beef operations and building long-term, profitable pathways for dairy beef calves year-on-year.
The futures of dairy and Wagyu will only get closer with time, Mr Nation said.
Look over the fence
There's plenty the beef industry can learn from looking over the fence at dairy's 'decade of cow improvement', Mr Nation said.
"We have invested across soils, forages, animals, climate and more but if I had to nail down one part of our production system where the most change has been made it's clearly cow improvement," he said.
"The reality is for quite a long period of time up until 2010 there was investment but the benefits hadn't really taken off. In fact, in 2010, there was a case for saying that's enough investment in genetics. For all the gains made, there were losses too."
However, a plethora of technologies matured in the one decade 'in a way that was unheard of in our hundred years of breeding', Mr Nation said.
Today, a hair sample turned around in four weeks can give a dairy farmer an estimated breeding value with 80pc accuracy.
"We've reached the tipping point where people use these with confidence," Mr Nation said.
The breeding values work has seen world-firsts for Australia too - in heat tolerance and feed saved (net feed index).
Australia was the first dairy country in world to introduce feed saved as a trait for the whole of industry to use and it is now plugged into global networks.
"When a dairy farmer gets a genetic evaluation on feed saved today, that information carries a lot of historic beef information too," Mr Nation said.
Norco price offer not reflecting costs
THIS week's price-increase offer from dairy co-operative Norco to its drinking milk suppliers won't go far enough to stop the exit of producers from the industry, says Gloucester dairyman and vice-chair of lobby group eastAUSmilk.
The Norco announcement of a 5 cents a litre co-operative premium payment for the next two months - coming on top of average base milk prices of around 70c/l - pales in comparison to what is needed in the wake of "unprecedented inflation" for farm inputs, he said.
"This is not a base price payment," he said, pointing out the premium equated to 0.7c/l for a 12 month period. "Norco has not lifted the base price."
Mr Forbes said the dairy community were frustrated by Bega's recent offer of 6c/l for central NSW and a paltry 5c/l for Queensland drinking milk suppliers, considering the component price of southern dairy farmers had soared $150/kg (about 12-14c/l) on the back of better world commodity prices.
There was some expectation from Parmalat suppliers that they might receive a substantial increase in the order of 12-15c/l to meet the rise of doing business but in the wake of Bega's offer that hope has been diminished.
"We have always been told that the Queensland drinking milk price should be based on the Victorian price plus freight," said Mr Forbes. "If we don't go to 15-20c/l more for our milk we will lose farmers in droves."
Farmers are now calling on supermarkets to raise the price of milk to $2/l to guarantee production of local fresh dairy.
David Littleproud calls for Aldi, Coles, Woolworths to explain farm cost pressures
David Littleproud is supporting calls by Victorian dairy leader Paul Mumford for supermarkets to raise prices and explain the reasons why.
Supermarkets need to raise the price of milk and explain the reasons why via a major marketing campaign, according to the Federal Agriculture Minister.
David Littleproud has backed calls by United Dairyfarmers of Victoria president Paul Mumford for the nation’s big three supermarkets to explain why dairy prices need to rise via in-house marketing.
The price of generic milk now sits at $1.30 a litre at Aldi, Coles and Woolworths but the UDV and other dairy groups say an immediate rise is necessary with fertiliser costs quadrupling in the past year.
“I think the supermarkets owe it to the industry — they’re the ones who devalued the industry,” Mr Littleproud said.
“What we’ve only recently announced is the $1m in transparency in pricing to bring that to the public attention and give power back to dairy farmers around volumes and prices and fat content … but the supermarkets have a lot to make up for, the way they devalued the industry.”
Mr Mumford last week told The Weekly Times that prices needed to rise and a mass marketing drive by the supermarkets should be initiated to explain the reasons why.
“It’s a case of leading the witness. If milk stays at $1.30 a litre, then the consumer thinks things are OK. Supermarkets need to do a lot more to explain why prices need to rise,” Mr Mumford said.
The Agriculture Minister said it wasn’t just dairy under inflationary duress and called for the consumer watchdog to do more to keep retailers accountable.
“It should be shown at the checkout, supermarkets are making farmers absorb it,” Mr Littleproud said.
“The ACCC needs to lift their game, I think they’ve been asleep at the wheel on this. Apple producers are very concerned about the input costs not being reflected. And the behaviour of the supermarkets was not allowing them an uplift in price despite the input costs, farmers don’t want charity, they want a fair price.”
A Coles spokeswoman said: “Coles contracts directly with Australian dairy farmers to purchase milk for Coles Brand fresh white milk in most Australian states, offering long-term contracts that provide farmers with certainty to plan for the future.
“The price Coles pays farmers for their milk is determined independently to the retail shelf price.”
Source: Alex Sinnott and Alexandra Laskie, The Weekly Times, 26 April 2022
Bega gives 2022-23 milk supply agreement indication after price release
Bega has issued a record opening price for the upcoming season. But when will its milk supply agreements be released?
Bega has revealed an opening price for the 2022-23 financial year of $8.40 a kilo milk solids, a record opening price for the processor.
Management also announced today a step up of 10 cents a kilo milk solids for northern and southern Victorian, Riverina and south-east South Australian suppliers, applicable from July 2021 to the end of the current financial year.
Bega Cheese chairman Barry Irvin said depending on supplier size and supply profile, most suppliers would receive an opening milk price in the range of $8.20 to $8.60 per kilo milk solids.
“As is always the case when setting milk price, it was important that we considered the returns in both the Australian and international markets,” Mr Irvin said.
“(We also considered) milk requirements for our significantly expanded portfolio of products and the competitive circumstances in each of our regions.”
With milk supply agreements yet to be released, Bega management says the crucial paperwork will be issued early next week.
Last month, Bulla was the first processor out of the starting blocks for the 2022-23 season.
The Colac-based processor confirmed in March an opening price of $7.40 to $8.00 per kilo milk solids for the coming financial year.
However, Bega is the first of the big three processors to confirm a 2022-23 price, with pressure now on Saputo and Fonterra to reveal their figures.
Bega beverage operations manager Mark McDonald said next season’s opening milk prices reflected the strength of Bega’s diversified branded domestic and international business.
“All our exclusive suppliers have a choice of milk price systems that best suits their farming business,” Mr McDonald said.
“That includes a introducing a new flat milk price system to support seasonal supply, broadening our 9/3 milk price system to more suppliers seeking early cashflow signals by including productivity incentives and maintaining milk price system that supports larger scale and flatter supply profiles.”
Processors are required to file opening prices by June 1, under the Federal Government’s Dairy Code of Conduct.
However, an April or May announcement can be revised by the processors in the weeks leading up to the June deadline, which occurred last year.
Fertiliser shortage: Nutrien Ag Solutions managing director Rob Clayton balances scramble for ag inputs
Nutrien Ag Solutions managing director Rob Clayton on sustainability shifting from a threat to farmers to a real opportunity.
A GLOBAL scramble for key agriculture inputs in the face of supply chain and production constraints has seen some Australian retailers more than double the size of their stockpiles heading into the crucial winter cropping season.
Nutrien Ag Solutions managing director Rob Clayton told The Weekly Times the rush for inputs, including key fertilisers, had pushed prices to decade highs and forced a rethink in the way the business sources product.
“We’ve had to stage product much earlier than we have in the past,” Mr Clayton said. “Right now (we) have about a billion dollars’ worth of stock sitting (in warehouses), where we would normally have about half of that.”
Mr Clayton said there was a need for Australian agriculture to get in front of supply chain issues, with calls from some sectors for more domestic production of inputs to counter rising costs and a massive blowout in transit times.
“It is a lot longer supply chain channel now than it was before,” Mr Clayton said.
“For instance, product out of China from the first phone call to when that product arrives was usually around 30-40 days but now it is 120-150 days.”
Thomas Elder Markets’ analyst Andrew Whitelaw said an increasing number of nations around the world were looking to shore up supplies of key inputs through domestic production.
He said a combination of factors were leading to the reduced global supply, including the crisis in Ukraine, which had seen sanctions imposed on Russia. He said while Australia wasn’t a huge importer of fertiliser from Russia, other nations were, which meant they had been forced to look to other markets to secure supply.
Mr Whitelaw said fertiliser production facilities being planned for South Australia and Western Australia could end up “producing more fertiliser than we need in Australia by a country mile”.
“I think the one thing to remember, though, is that any of these plants, if they get built, which is probably still a big if, it’s not going to be until 2026, so it is not going to fix any of our immediate problems,” he said.
Federal Government commitment to a Dairy Symposium and Digital Dairy Platform announced
The commitment by the Federal Minister for Agriculture David Littleproud to hold a dairy symposium after the upcoming Federal election is welcomed by eastAUSmilk.
This announcement followed on a meeting between the President of eastAUSmilk, Matt Trace, with the Deputy Prime Minister Barnaby Joyce at a recent dairy farmer meeting at Muswellbrook NSW in early April where Matt raised with the DPM the holding of a dairy symposium.
Minister Littleproud also met with dairy farmers at Singleton NSW on 20 April with eastAUSmilk Vice President Graham Forbes and during an interview on the NSW Country Hour later that day, discussed the importance of a dairy symposium. You may listen to the interview at ABC Country Hour
Barnaby Joyce convened the 1st dairy summit after the 2016 federal election which brought together dairy stakeholders to consider issues confronting the industry due to the collapse of Murray Goulburn and the then clawback of dairy payments to dairy farmers.
The time was right for a look back over the past years since the initial dairy symposium in August 2016 and to determine what has occurred since that time and find out what has worked and what needs further review.
In reference to the symposium, Matt indicated that the dairy industry needs to find further solutions to the issues that confront those players within the dairy value-chain, particularly given the market failure within the industry and which was highlighted in the ACCC's report into the dairy industry.
The development of the dairy mandatory code of conduct, which can trace its beginnings to the 2016 dairy symposium, was the beginning of the restoration of trust and transparency in the relationship between the dairy farmer and processor.
Further discussion needs to now occur around the relationship of the supermarket within the dairy value chain.
Co-CEO of eastAUSmilk, Shaughn Morgan, has indicated that the Code has a few more steps to enhance its ability to provide the trust and transparency required.
The dairy symposium provides a place for that to occur.
The Federal Minister for Agriculture has also announced today the development of a digital platform to assist dairy farmers being provided with up-to-date information regarding value, price and other relevant dairy data.
The development of this digital platform in conjunction with the Dairy Code and the Milk Value Portal are beginning to provide dairy farmers with a suite of dairy products that will assist them in addressing the many varied issues that they are confronting daily.
This will also lead to further discussion of supermarkets being subject to the Dairy Code given the apparent 'inadequacy' of the Food and Grocery Code to provide appropriate oversight of supermarkets and their relationships with fresh food suppliers.
With the announcement and commitment today by Minister Littleproud, eastAUSmilk looks forward to being a part of providing the solutions with the other dairy bodies to stop the decline of the number of Aussie dairy farms and in finding a way to rebuild the strength and resilience of dairy farmers generally.
Automation Saved Labour, Water & Energy for Solid Set Irrigation
A Jaggan dairy has implemented an irrigation energy management opportunity from the energy audit report they received through the Energy Savers Plus Program Extension. Through the program the business received a dairy shed energy audit, carried out by AgVet Energy, as well as an irrigation energy audit, completed by The Energy Guys, both engaged by QDO.
The farm aims to increase their homegrown feed and have been increasing their irrigatable area with implementing sections of solid set irrigation systems.
With more and more sections of solid set irrigation systems to manage the business chose to invest in automation.
eastAUSmilk Project Officer, Jade Chan, and I visited the site and conducted a performance test on the irrigation to evaluate the actual energy savings and outcomes achieved since implementing a recommendation from the energy audit.
Installing an automation system to their solid set irrigation has resulted in labour-saving benefits.
When irrigating manually the irrigations would be run for twice in five-hour intervals (per station) which meant a late-night run into the paddocks to switch over the stations. To apply the 287ML per year there are 16 cycles of the 17 stations per year. With each cycle taking 9 nights the business was irrigating 144 nights per year.
Labour required to open and shut valves on the irrigator is estimated to be 15 mins costing the business approximately $2,880 per year. The new automation system uses a controller to manage irrigation scheduling with minimal time required to switch over sections.
The automation has also increased the water efficiency of business as previously there was approximately a 10% over application of irrigation. The improvements have allowed the irrigation to be applied across three-hour intervals instead of two five-hour intervals. Reducing the excessive application of irrigation water, saving 14ML.
Reducing the hours of irrigation also results in a lower energy use saving the business 4,861kWh annually.
With smaller application rates soil moisture remains at optimum for longer, smaller amounts are applied which reduces excess irrigation water applied and will improve pasture production.
The farm also upgraded the sprinklers on a section of the irrigations to improve their water use efficiency.
The pre-existing sprinklers were replaced with NaanDanJain 5035 sprinklers which improved the irrigation’s distribution of uniformity (Du). The new sprinklers were able to achieve 79.91% in comparison to the 58.4% achieved by the old sprinklers. This also increased the average application rate to 9.7mm/hr from 4.4mm/hr. Improving the irrigation efficiency of their solid set will also improve levels of production by increasing effective irrigatable area.
The total expenditure for the business to implement the upgrades was over $47,000. Valuing the increased pasture production at $5,000, plus the labour saving of $2,880 and $2,166 for electricity savings the calculated payback period of this investment is 4.7 years with a return on investment of 21.3%.
Torie Harrison – eastAUSmilk Project Officer
Budget pledges hold hope for dairy
PLEDGES: Dairy farmers will be pleased to see initiatives in the budget addressing the increasing cost of farming, including flood recovery.
Last week, the federal government and opposition used the 2022 budget speeches to make their cases to be elected to govern Australia for the next three years.
Neither delivered everything Australian Dairy Farmers (ADF) is seeking on behalf of members, yet, together, they made commitments that support three objectives in our 2022 Federal Election Policy Statement:
an improvement in nutritional health in Australia, especially in aged care, and abroad
an investment in planning and infrastructure to grow jobs and liveability in the regions
an increase in dairy sustainability and productivity through innovation and markets.
The budget reply from opposition leader Anthony Albanese was silent on agriculture, however dairy farmers stand to benefit from a pledge by Labor to set minimum standards for nutrition in aged care. This is a policy based on science and if properly executed will increase the consumption of dairy foods in residential aged care.
Research shows that when aged care residents increase their daily intake of dairy foods from two to 3.5 serves per day the incidence of fractures and falls declines. Fractures are reduced by one-third. ADF has been calling on politicians to consider how they can help resolve malnutrition in aged care. This commitment to better nutrition delivers and warrants bi-partisan support.
The budget reply, however, did not acknowledge the importance of agriculture to Australia's economy. It overlooked that revenue derived by agriculture is shared across the economy.
By contrast, the budget from the government, recognises that farming feeds and clothes Australians. It contained spending on initiatives that support two of ADF's other key policy objectives - more investment in regional development and more funding for innovation to increase sustainability and productivity.
Dairy farmers will be pleased to see initiatives in the budget addressing the increasing cost of farming, including flood recovery, and further support to grow jobs in our regions.
Key announcements in the budget that support the dairy sector include:
The fuel excise and excise-equivalent customs duty rate that applies to petrol and diesel will be halved for six months, which will create savings for every dairy business as of today.
Over $2 billion in support measures for flood affected primary producers, small businesses, not-for-profit organisations and councils will help the 190 dairy farms that have been impacted by the NSW and Queensland floods.
$6.9 billion investment in nationally significant, transformational water infrastructure projects to assist in developing regional communities and an additional $137.4 million towards infrastructure and compliance initiatives for the Murray-Darling Basin, which will address water security.
$2 billion to establish the Regional Accelerator Program (RAP) to drive transformative economic growth and productivity in regional areas, potentially supporting some of Australia's dairy industry's regions to enhance their supply chain competitiveness.
Over $1.2 billion to expand mobile coverage, connectivity, resilience and affordability in regional Australia which will assist in stimulating adoption of digital technologies.
$250 million to extend the Modern Manufacturing Initiative to support businesses in priority sectors - including agriculture - to deliver high impact projects such as domestic manufacture of fertiliser and other inputs.
$148.6 million to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia such as replication of the Nowra bio-digestor plant in other dairy regions.
Some of these and other initiatives in the budget support delivery of the ADF's policy statement.
In particular, the investment in R&D is welcome. Concessional tax treatment for corporate taxpayers who commercialise their eligible patents linked to agvet chemical products, and $505.2 million to support university research projects from proof of concept to commercialisation will in time bring benefit to the farm gate.
Policies that drive nutritional health, regional jobs and on-farm productivity and sustainability support dairy's economic recovery and set the foundations for agriculture to grow to $100 billion by 2030.
We can expect further announcements during the election campaign in coming weeks.
The next three years is a defining period for the sustainability of the Australian dairy industry.
With the right policy settings, the next government can ensure the dairy sector sustains its contribution to life in Australia.
Source: Rick Gladigau, ADF President, Farmonline National, 10 April 2022