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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

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.”

Northern Rivers & Rural News

Trailblazing women join together to discuss breaking bias on International Women’s Day 2022

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Trailblazing women join together to discuss breaking bias on International Women’s Day 2022

Trailblazing women join together to discuss breaking bias on International Women’s Day 2022

Landcare Australia and the Australian Government Department of Agriculture, Water and the Environment are bringing together a formidable group of women for a conversation about their challenges and triumphs.

In an online panel event on International Women’s Day, Tuesday 8 March, Regional Agriculture Landcare Facilitator Kerstie Lee will lead the discussion, focussing on this year’s theme – #BreakTheBias.

The panel includes Natalie Sommerville, a farmer, grazier and proud Torres Strait Islander woman from the clan Wagadagam of the Goemulgal people of Mabuyag Island. Currently living and working on Ngadjuri Country in South Australia’s Mid North, when Nat is not farming she is mentoring Aboriginal students.

Joining her is Sally Downie, who was selected as an ABC Heywire Trailblazer in 2019 for her work advocating for improved mental health services and support in drought-affected communities in Central West NSW. She is also a farmer, student and part-time drought policy officer.

Fiona Hill-Stein will add insights from her career advising on agricultural policy, drought and rural assistance, and natural resource management at the Australian Government Department of Agriculture, Water and the Environment.

Rounding out the panel is Tess Grieves, Regional Landcare Coordinator at North Central Catchment Management Authority in Victoria. A driven environmental achiever in her community, she is nominated for the Steadfast Young Landcare Leadership Award at the 2022 National Landcare Awards.

“We are thrilled to present an engaging, thought-provoking discussion with Kerstie, Natalie, Sally, Fiona and Tess about their experiences and accomplishments in landcare,” said Dr Shane Norrish, CEO Landcare Australia.

“Launched over 35 years ago by two women – Joan Kirner and Heather Mitchell – landcare has led the way with women in leadership roles across Australia. This event celebrates the thousands of women in landcare and their contribution to local communities and natural resource management,” said Dr Norrish.

International Women’s Day 2022 aims to inspire everyone to celebrate women’s achievement, raise awareness against bias, and take action for equality.

Don’t miss Landcare Women Break the Bias, Tuesday 8 March, 2pm – 3.30pm AEDT.

Register to attend at landcareaustralia.org.au/webinars/iwd2022.

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Northern Rivers & Rural News

Farmers get their say on land use

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NSW Northern Rivers Breaking News

Farmers get their say on land use

The fight between farmers and developers could be a thing of the past thanks to a new mapping project that will shape future regional planning decisions.

With agriculture, urban development, renewable energy infrastructure and other land use interests competing for space in our increasingly busy regional areas, NSW Farmers is urging landholders to have their say on State Significant Agricultural Land mapping.

NSW Farmers Vice President Xavier Martin said it was an important process that would help protect farmers from conflicting land uses into the future.

“Farmers are being given a direct opportunity to have their say on the important issue of land use planning, and this could set the course for years to come as land use interests in regional areas grow,” Mr Martin said.

“Unfortunately, agricultural land can be viewed as a default zone when it comes to matters such as urban expansion, energy infrastructure and mining.

“There’s a finite amount of land suitable for agriculture and at the moment, we are losing it in a very fragmented way, but the state government’s mapping exercise is an opportunity to resolve that poor outcome.”

Mr Martin said the NSW Government’s understanding of the regional and state significance of agricultural areas would go a long way to minimising future conflict.

“The understanding of high value agricultural land must be multi-faceted, taking into consideration soil quality, yield, adaptability, proximity to export hubs and regional importance,” Mr Martin said.

“If the government is to identify and protect agricultural land on a tiered basis, then they need to understand what makes land strategically important – and farmers will be the repository of that knowledge.

“The goal of NSW Farmers advocacy in the land use space is to ensure agriculture is being considered in land use decisions. We need to start somewhere, and this mapping is the starting point.”

While the first iteration of the government’s mapping is not perfect, Mr Martin said consultation and refinement would help produce a planning tool that benefits landholders.

Consultation on the first State Significant Agricultural Land mapping is open until late January 2022 and the NSW Department of Primary Industries is welcoming input from farmers.

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Northern Rivers & Rural News

Northern NSW farmers to have their say on climate, regional opportunities

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The Northern Rivers own newspaper

Northern NSW farmers to have their say on climate, regional opportunities

Friday, 10 December 2021. From Taree to Lismore, Northern NSW farmers can have their say on what Australia’s climate policy should look like at one of Farmers for Climate Action’s end-of-year catch-ups next week.

The seven networking events, created by farmers for farmers passionate about a better climate future, are an opportunity to be updated on Australia’s climate policy, share local insights and learnings from the year, and ensure we’re feeding the right climate solutions back to industry and decision-makers.

The 1.5-hour sessions will run from Monday 13 December to Wednesday 15 December in the following locations:

Taree: Monday 13 December from 6.30pm at the Caravilla Motor Inn Bistro
Port Macquarie: Tuesday 14 December from 9am at Hibbard Sports Club
Dorrigo: Tuesday 14 December from 1.30pm at the Food Angel Cafe
Bellingen: Tuesday 14 December from 630pm at Bellingen Riverside Cottages
Grafton: Wednesday 15 Dec from 9.30am at Vines at 139
Kyogle: Wednesday 15 December from 2pm at Sugarbowl Cafe
Lismore: Wednesday 15 December from 6.30pm at the Lismore Workers Club mezzanine

Peter Holding, third-generation Harden farmer and FCA community outreach officer said:

“Here’s your opportunity to meet like-minded farmers and compare notes on the year we’ve had. We can have a frank discussion about where Australia’s climate policy is at and, more importantly, what this means for our region and livelihoods.

“Farmers are on the front lines of climate change, with many of us in this region living through droughts, floods, bushfires and more.

“Strong climate policy creates a raft of opportunities for regional Australia and we want Northern NSW farmers to be central to the conversation to ensure we get the best opportunities for the region.”

The events will be free of charge. RSVPs are essential and refreshments will be provided. To register visit www.farmersforclimateaction.org.au/events.

Farmers for Climate Action is a movement of almost 7000 farmers and agricultural leaders working to ensure that farmers, who are on the frontlines of climate change, are part of its solution.

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