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Northern Rivers & Rural News

Australian dairy at a critical juncture – industry report

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Australian dairy at a critical juncture – industry report

The Australian dairy industry is at “a critical juncture”, with recent record-breaking profitability in the sector offering a solid footing to reboot much-needed growth in milk production, according to a new research report.
The report, Australian Dairy Industry: At an Important Juncture, by agribusiness banking specialist Rabobank, says “after a rollercoaster ride” over the past decade, Australia’s dairy sector has experienced a remarkable turnaround, underpinned by favourable seasonal conditions, high farmgate pricing and a shift in the balance of power within the supply chain (with increasing competition for milk supply and the introduction of the Dairy Industry Code of Conduct).
But capitalising on this current strong position to invest in expanding national milk production will be “vital” for the future success of Australia’s dairy industry, the report says, to take advantage of growth opportunities in export markets.
Report author, Rabobank senior dairy analyst Michael Harvey said in recent years the Australian dairy sector had navigated a “perfect storm of widespread drought, isolated bushfires and floods – all coupled with a severe global market and unprecedented industry disruption and instability”.
“This turmoil resulted in a squeeze on the profit pool and a drop in milk solids produced,” he said. “It also zapped farmer confidence, which ultimately heralded a major shift in how the supply chain operates.”

Solid footing
Right now, though, the report says, the dairy industry finds itself on a solid footing, with record-breaking profitability for many. “The southern Australian dairy region is on track for a third consecutive season of outperforming industry benchmarks for average EBIT (earnings before interest and tax). And there has been a lift in confidence levels and investment intentions,” it says.
However, Mr Harvey said, while some recovery in national milk production has been underway, so far, the milk supply response has “underwhelmed initial expectations”, despite the period of farmgate profitability.
“The Australian dairy supply chain processed 8.86 billion litres of milk in 2020/21, 950 million litres less than in 2014/15, with 55 per cent of the fall coming from the northern Victoria irrigation system,” he said.

Milk growth momentum
Mr Harvey said expanding Australia’s national milk supply is “essential to the growth prospects of the Australian dairy industry as it aims to construct sustained growth outside of a maturing domestic market”.
“In contrast to the local market, key dairy export markets have considerable headroom for growth in the coming decade, particularly in emerging Asia,” he said. “This means offshore markets provide plenty of ‘blue sky’ and exports will remain the engine of growth for the sector.”
However, without sufficient milk supply growth, the Australian sector will face challenges penetrating growth markets offshore, the report says.
“A vibrant industry requires a strong presence in growing export markets and being able to fully leverage existing access to Asian supply chains,” Mr Harvey said. “Australian dairy has some strong global market credentials, but a lack of a sustained growing milk pool is a weakness to overcome.
“Even with the mature domestic market, demand from key customers is outstripping supply growth, and many customers in the industry will require more volume over the next decade.”

‘Missed’ opportunity
The report says with the Australian dairy supply chain short of milk solids and the foundations in place for a period of investment “on farm and for milk production growth”, the stage is set for the industry to take advantage.
“If this strong run of healthy farm profitability, elevated investment ambition and positive investment outlook does not result in some well-executed long-term investments, it will be a missed opportunity for the industry in reigniting growth,” Mr Harvey said.
“And to fully unlock growth, significant long-term capital investment is required to increase efficiency and production capacity.”

Profitable investment
The Rabobank report says Australia’s dairy sector is expected to provide profitable capital investment opportunities for farm businesses over the next decade.
“While a transformational lift in profitability is not expected, there is a compelling case that the industry may outperform the previous decade in terms of EBIT performance,” Mr Harvey said.
The report notes investing for long-term growth will not be the right strategy for every dairy farm business.
“While a growing industry is vital for the wider sector, the reality is that farm businesses should only invest in growth if there is a profitable and sufficient return based on any planned investment strategy. And for enterprises willing to invest, a well-structured plan and consideration of capital at risk is required,” he said.

Changing supply chain

A close watch also needs to be kept on the changing dairy supply chain, with further shifts, consolidation and rationalisation expected in the coming decade.
“This constant supply chain evolution – which includes a variety of dairy company business models with very different product mixes, manufacturing footprints and growth priorities – provides increased options for dairy producers and presents risks and opportunities for farm businesses,” Mr Harvey said.
The Rabobank report says a focus on reducing environmental impacts throughout the dairy supply chain will also remain a consistent theme over the coming decade.
“There is a goal to reduce emissions intensity by 30 per cent from 2015 levels by 2030, with more ambitious targets also being considered,” Mr Harvey said.
“It is important to take a long-term view on the opportunities that will come with these investments, including productivity and efficiency gains, carbon sequestration incentives, and potential access to high-margin and/or high-growth markets.”

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Vigilance Urged to Combat Invasive Giant Devil’s Fig

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Vigilance Urged to Combat Invasive Giant Devil’s Fig

 

By Robert Heyward

North Coast landholders are being called upon to stay vigilant against the spread of Giant Devil’s Fig (Solanum chrysotrichum), a highly invasive woody weed that poses a significant threat to agriculture and natural ecosystems. This problematic species is prevalent in grazing lands, waterways, forests, roadsides, parks, and gardens, particularly in the coastal regions of northern and central New South Wales.

Ashley Donges, Regional Weed Coordinator for North Coast Local Land Services, highlighted the critical role of community involvement in controlling this invasive plant.

“Preventing the spread of Giant Devil’s Fig is crucial for safeguarding our agricultural productivity and protecting native ecosystems,” Donges said. “We urge all residents and landowners to actively identify and manage this weed to minimise its impact.”

Giant Devil’s Fig competes with desirable pasture species, leading to reduced agricultural productivity and increased costs. The plant contains toxins that can harm livestock if ingested in large quantities, and its sharp prickles can cause injuries to both humans and animals, as well as hinder access to water sources for livestock. In natural landscapes, the weed forms dense thickets that outcompete native vegetation, further degrading the environment.

“Our goal is to equip the community with the knowledge and tools needed to combat Giant Devil’s Fig effectively,” Donges continued. “By working together, we can mitigate its impact and protect our valuable natural resources.”

Under the NSW Biosecurity Act, all residents have a General Biosecurity Duty to prevent, eliminate, or minimise the biosecurity risk posed by Giant Devil’s Fig.

The weed can be identified as a shrub or small tree up to four meters tall, with prickly stems and hairy leaves when young. It produces small, white star-shaped flowers in clusters from autumn to spring, followed by round berries that turn yellow or orange-yellow.

For detailed identification and control methods, residents are encouraged to visit the NSW WeedWise website.

There is a Giant Devil’s Fig Exclusion Zone covering the local government areas of Bellingen, Clarence Valley, Coffs Harbour, Kempsey, Lord Howe Island, Nambucca Valley, and Port Macquarie-Hastings. In these areas, residents must notify their local council if the weed is found and eradicate it immediately. A Containment Zone covering Ballina, Byron, Kyogle, Lismore, Richmond Valley, and Tweed local government areas requires residents to prevent the plant’s spread, reduce its impact, and report sightings to Rous County Council.

For technical advice and assistance, residents can contact their local council’s weeds officer or consult resources available on the NSW WeedWise website

 

For more rural news, click here.

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Free webinar for farmers to learn how RIC loans can help rebuild and recover from severe business disruption

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Free webinar for farmers to learn how RIC loans can help rebuild and recover from severe business disruption

 

Australian Government farm business lender, RIC (Regional Investment Corporation) is hosting a free webinar on 18 September 2024 for farmers, advisers and agriculture industry representatives to learn more about how RIC’s low-cost Farm Investment Loan can help support farm businesses to rebuild and recover after severe business disruption.

RIC Chief Executive Officer, John Howard, said RIC’s Farm Investment Loan is aimed at supporting farmers who have experienced significant financial downturn, as a result of an unforeseen disruption or cumulative impacts to their business.

“Our Farm Investment Loan recognises that unexpected business shocks outside a farmer’s control can play havoc with financial plans. With a low variable interest rate and interest-only terms for the first five years, RIC loans can provide some financial relief to help farmers get back on their feet,” Mr Howard said.

“To be eligible for a Farm Investment Loan, farmers need to show their underlying business is solid, but that they need help to recover following an event that has financially impacted their business, like drought or other natural disasters, or even a biosecurity event.

“More than 100 people from across the country have already registered to learn more from our specialist Agri Lending Manager and one of our customers who will share their experience,” Mr Howard said. Queenslander cattle grazier Rachael Lehmann is pleased to join the webinar to help other farmers learn more about how she and her husband Dane benefited from a RIC Loan. She will share how their low-interest loan supported their recovery and helped improve their business after experiencing drought and successive natural disasters.

The RIC Farm Investment Loan enabled them to refinance part of their existing commercial debt to RIC’s concessional variable interest rate. This allowed the business to improve cash flow, enabling them to recover faster and move forward. “The change in interest rate is quite a substantial amount of money for us, so it has taken the pressure off. It just meant that we were going to have the opportunity to get ahead.

“It’s a huge step up for us and it will have amazing onflow effects for our cost of production and that’s very exciting,” Rachael said.

The Farm Investment Loan provides up to $2 million over a 10-year term with the first five years interest only followed by principal and interest for the remaining five years. The current variable interest rate is 5.18 per cent and there are no fees to apply, make extra repayments, or for early loan repayments.

The free webinar is on 18 September 2024 from 12pm-1pm AEST, to register visit. For more on the Farm Investment Loan visit here. Read more about Rachael and Dane Lehmann’s story here.

 

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Biosecurity Week focusses on avian influenza

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Biosecurity Week focusses on avian influenza

 

As Australia recovers from its most severe avian disease outbreak in 50 years, the focus has shifted to preparing for future avian influenza threats, particularly the virulent strains that have devastated poultry, wild birds, and mammals worldwide.

The recent H7 high pathogenicity avian influenza (HPAI) outbreak in Victoria, New South Wales, and the Australian Capital Territory demonstrated the effectiveness of Australia’s national response in containing and eradicating the disease in poultry. Since July 2024, no new H7 HPAI outbreaks have occurred, marking the ninth successful eradication of such incidents in Australia since 1976.

Health experts from the interim Australian Centre for Disease Control emphasise the importance of a One Health approach in safeguarding Australians. This approach integrates human health with environmental and agricultural health, recognising their interconnection. Australia remains the only continent currently free from the new H5 HPAI strain, making vigilance crucial to monitor and understand its potential spread.

Extensive preparedness and response efforts are already underway, building on long-established surveillance and biosecurity planning measures.

Key figures in these efforts include:

  • Dr. Brant Smith, ACT: As the National Animal Disease Preparedness Coordinator at the Department of Agriculture, Fisheries, and Forestry, Dr. Smith leads efforts to strengthen Australia’s animal disease prevention and response capabilities, preparing for potential H5 HPAI detection. He collaborates across governments, communities, and industries to ensure a swift and effective response if the virus is found, minimising impacts on wildlife, the environment, and agriculture.
  • Dr. Fiona Fraser, ACT: As the Threatened Species Commissioner at the Department of Climate Change, Energy, the Environment, and Water, Dr. Fraser focuses on raising awareness and reducing threats to Australia’s most imperilled species, including the risks posed by H5N1 HPAI to wild birds and mammals.
  • Dr. Tiggy Grillo, Tasmania: As National Coordinator at Wildlife Health Australia, Dr. Grillo oversees the National Avian Influenza Wild Bird Surveillance Program, monitoring avian influenza and investigating unexplained bird deaths across Australia.
  • Dr. Guy Weerasinghe, Queensland: As Technical Manager for the Northern Australia Quarantine Strategy, Dr. Weerasinghe leads surveillance for exotic diseases in northern Australia, ensuring potential threats like H5 HPAI are effectively managed.
  • Marietta Matasia, Top End: As Indigenous Ranger Coordinator, Marietta oversees critical biosecurity activities in Cape York Peninsula, monitoring marine abnormalities and avian influenza signs to protect the region’s biodiversity.
  • Dr. Sarah Britton, NSW: Working with the interim Australian Centre for Disease Control, Dr. Britton integrates human, environmental, and agricultural health, addressing issues like zoonotic diseases and antimicrobial resistance.

For more information on Biosecurity Week, visit the official Biosecurity Week page.

 

For more rural news, click here.

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