Senate Inquiry looks at Supermarket Behaviour
EastAUSmilk President Joe Bradley appeared before the Senate Select Committee Inquiry into Supermarket Prices on 13 March, following the submission we made in February. Since then, the Committee has heard from other industry bodies including Australian Dairy Products Federation, consumer groups, government departments, small business organisations, individual businesses, and, of course, the big supermarkets.
The big supermarkets are both now on record as being supportive of a mandatory Food and Grocery Code, which is positive. However, in their evidence to the Senate Committee, both Coles and Woolworths denied any problems with their pricing, purchasing, behaviour, and culture, in spite of the very clear findings in the Interim Report of the Emerson Review of the Food and Grocery Code.
Whistleblowers and former industry insiders spoke at length about the tactics used by supermarkets to maximize profits, including predatory pricing, unfair contract terms, imposition of fees and charges on suppliers, bullying, use of private label brands to block branded suppliers, and pressuring suppliers to lower prices. Many allegations were made about the way the big supermarkets bully and retaliate against suppliers, including threats of contract termination, reduction in orders or shelf space, exclusion from promotions, imposition of additional costs or penalties, delayed payments, or payment terms changes, blacklisting or exclusion from supplier lists, and pressuring other business partners.
These allegations are entirely consistent with the submissions made by eastAUSmilk to the Senate Committee, and also to the Emerson Review of the Food and Grocery Code.
There have been improvements by some retailers in recent years, especially by those retailers including Coles who now have a significant number of direct suppliers. EastAUSmilk knows many of our members have excellent relations with supermarkets for whom they are direct suppliers, which is definitely positive.
Both supermarkets received a grilling by the Committee, particularly the outgoing Woolworths Chief Executive Officer Brad Banducci. Unfortunately for Mr Banducci and Woolworths, his performance at the senate hearing was poor. His inability to answer a large number of simple questions frustrated the Chair, who threatened Mr Banducci with jail several times for failing to answer these questions.
In and around the hearings, various proposals have been advanced to reign in the abuse of their market power by big supermarkets. Some of those suggestions were to legislate to give the government the power to force big retailers to be broken up into smaller units, to legislate to require supermarkets to stop buying up plots of land in order to block competitors setting up nearby, and of course a range of measures designed to stop bullying and reprisals by supermarkets.
The Senate Committee inquiry was supposed to wrap up last week but is now considering whether to seek evidence from several large multinational food manufacturers such as Coca-Cola and Nestlé.
By Mike Smith, eastAUSmilk government relations manager
Dairy Code Review Moves Slowly Forward
Over objections from eastAUSmilk, the Commonwealth Government deferred the second review of the dairy industry code, so it is now to be completed by late 2026 instead of late 2023.
They’ve started that review with a discussion paper, asking for input to Department of Agriculture, Fisheries and Forestry by last week, on eight previously-identified issues.
EastAUSmilk already had a list of issues to raise, and most of them fitted within the eight listed by DAFF. However, we refuse to be limited by other people’s priorities, in the Dairy Code matters we raise on behalf of members. In the end we advanced 28 separate propositions to do with our list of issues and DAFF's eight.
It’s a bit hard to identify the ultimate origin of each of their eight issues, but some have clearly come from milk processors who want to weaken the Code.
The eastAUSmilk submission called for monitoring of margins through the whole supply chain, better prepared income estimates for farmers and reconciliation of those estimates against actual earnings, long term contracts to have no less than the year one price in subsequent years, minimising milk swaps between processors while they are used to keep prices low, a requirement for bargaining in good faith and full disclosure when settling milk supply agreements, and preserving the cooling off period. And many more!
Overall we were clear that there is still an imbalance between processors and farmers in the market, and that Code needs strengthening rather than weakening.
What happens now? DAFF say they will consider submissions, then consult with industry about the conclusions they reach. Once that’s done, they will collate stakeholder feedback, and make recommendations to the government. The outcomes of this process will guide the rest of the Code review, which will look at the whole the Code, not just these eight topics. The Minister for Agriculture, Fisheries and Forestry Murray Watt has committed to commencing that process by September this year.
By Mike Smith, eastAUSmilk government relations manager
It’s Showtime!
Last week I visited the Sydney Easter show with my president Joe Bradley. It was my first opportunity to visit the show and I was interested to see what it was like after hearing so much about it. The show is very impressive and a great legacy from the Sydney Olympics from 24 years ago. There is so much space throughout the whole venue and so many great facilities.
The dairy pavilion is also very impressive being so large and comfortable for both cows and farmers. Also, for members of the public to see where their milk comes from. The milking shed was quite remarkable and allowed the public to comfortably watch cows being milked in a real modern herring bone dairy without getting in the way of farmers and the cows. The judging area being adjacent to the dairy pavilion also made it very easy for all, although some rain on the final day of judging caused a slight inconvenience.
The quality of the cows was impressive, and the international judges noted the improvement in the quality of animals over the past 5 years including for the Brown Swiss breed. I am a complete novice when it comes to judging the quality of cows, but I’m sure my Italian friend Angelo speaks with authority when he states this.
It was also great to meet so many dairy farmers and have many discussions with them about the challenges facing their futures. It would have been great to speak to more farmers, but the demands and stresses of showing cows means that I didn’t have that opportunity with all farmers.
I look forward to one day returning to the easter show. More importantly, I look forward to greater mixing between NSW and Queensland dairy farmers at future events including the Sydney show and Ekka.
By Eric Danzi, eastAUSmilk CEO
Dairy Symposium
On 22 March, a national dairy symposium was held in Melbourne. Almost 100 people attended included myself, the eastAUSmilk president Joe Bradley and a range of people from industry, government and unions. The key issues in the dairy industry are restructuring the dairy industry, increasing profits leading to growth and prioritising Australian dairy products.
Restructuring the dairy industry was the key outcome from dairy plan and nothing has been done on this front except QDO merging with Dairy Connect to form eastAUSmilk. This has caused massive frustration for dairy farmers who want duplication and waste removed and outcomes for dairy farmers. This was the focus of a farmer forum before the main symposium and the need for change was extremely clear to farmers and their representatives. Unfortunately, this issue was barely touched on during the main forum.
Minister Watt committed to seriously considering proposals from the industry to restructure the industry. Given the minister overseas Dairy Australia, no meaningful restructuring is possible without his approval. He has the power to lead or block change in the industry.
There was some discussion re increasing profitability and production and a commitment from the minister to explore this further. Key issues to drive profit and production including increasing the price and fixing market issues relating to the retail sector. The 7 retail inquiries must lead to meaningful change not be swept under the carpet. Improving pastures is critical for farmers in Queensland and NSW where we have lagged behind over the last 50 years. Restructuring the industry to effectively focus on farmer profits and production is key.
Australian dairy products must be prioritised in the eyes of consumers. It is hard to understand why countries who heavily subside their industries are able to dump products into Australia.
If the dairy symposium is to be of value, then rapid progress must be made on the real issues facing the dairy industry. If not, the decline will continue and it will be another talk fest with no outcomes for farmers.
By Eric Danzi, eastAUSmilk CEO
EastAUSmilk presents to the Senate
After eastAUSmilk made a submission to the Senate Select Committee on Supermarket Prices, we were invited to make an in-person submission to their public hearings. The Senate Committee was established by The Greens to look at market concentration, competition, prices and margins, and frameworks to protect suppliers. These are obviously of great interest to our members.
eastAUSmilk President Joe Bradley spoke with the Committee by phone link on 13 March, and it was clear Senators had read our submission, and had many questions for Joe about the issues raised in our submission, and other submissions.
We also provided the Committee with a copy of the submission eastAUSmilk made to the Emerson Review of the unenforceable and useless Food and Grocery Industry Code.
eastAUSmilk members know supermarkets have enormous influence on farmgate prices, which is why we have made submissions to several of these inquiries. It is clearly in the interests of eastAUSmilk members, and the dairy industry a whole, for the relationship between supermarkets, all of their suppliers, and the whole supply chain, to be cleaned up.
In our written submission and Joe’s evidence, we stressed the need for the Food and Grocery Industry Code to be made mandatory and for supply chain margins to be monitored, and Senators raised claims of intimidation of suppliers by supermarkets. eastAUSmilk’s submission to the Emerson Review addressed that issue extensively, because the more we talk with milk processors and other supermarket suppliers, the more they open up about their fear of ruining their businesses if they speak up themselves.
In many respects, our submissions to these reviews and inquiries speak on behalf of processors and others, because they don’t dare do so themselves. eastAUSmilk is doing their jobs for them, because getting these issues addressed is so important for the wellbeing of members and the future of the dairy industry.
Other topics covered in Joe’s discussion with the Senate Committee included the lack of competition in fresh food supply, the mental health impact on farmers of prolonged underpayment, the reducing milk pool and dairy herd, and supply chain unreliability vs. local sourcing.
Let’s see what the outcome is!
By Mike Smith, eastAUSmilk Government Relations Manager
Agritourism in Dairy
Mention agritourism and most dairy farmers will run for the hills, but diversification needn’t mean that tourism takes over your life, and certainly not your farm. Agritourism is an extremely flexible addition to your farm business offering many levels of commitment, interaction, and capital investment. Preparation is essential to any on-farm diversification – have a plan to ensure this new path works for you and your farm and seek help from experienced operators. eastAUSmilk also provides assistance to members looking to diversify.
It’s often thought agritourism diversification means you’re not a ‘real’ farmer anymore. In fact, that’s far from the truth, and even further from reality if your goal is to provide genuine farm experiences and/or products. Adding an agritourism sideline to your business can provide a much needed cashflow boost when profitability of the farm is threatened. It can be used as an interim measure to lift a below average season, to build reserves for on-farm capital investment, or a long-term strategy for succession and retirement goals. Agritourism is a supplementary income that sees you completely in control of setting the parameters and pricing.
Many farmers will say they’re not a people person, preferring the company of their animals. I’ve yet to meet a farmer who doesn’t love a yarn, particularly when the conversation involves farming or the weather. You might be surprised to learn how interested city folk are to hear genuine stories about farm life told by the farmer. These are stories that will be shared with friends back in the city - moments they’ll remember when purchasing their next bottle of milk. These connections provide value for the social licence of our industry and make a real difference.
A far cry from the price-taker situation most dairy farmers find themselves in, agritourism encourages independence and confidence for farmers.
By Kay Tommerup, eastAUSmilk Board Member
Everyone’s Talking about the Big Supermarkets
Last week, the Queensland government announced a Parliamentary Supermarket Pricing Select Committee, chaired by Member of Parliament Tom Smith, whose Bundaberg electorate is one of Queensland’s biggest food bowls. The Committee is to look at impediments to fair pricing, including impediments to the profitability of primary producers, and report by 21 May 2024.
As well as the current consultation about the Dairy Industry Code there are now seven inquiries under way, all looking at the bad behaviour of big supermarkets.
eastAUSmilk members know supermarkets have enormous influence on farmgate prices, which is why we have made submissions to several of the these inquiries. It is clearly in the interests of eastAUSmilk members, and the dairy industry a whole, for the relationship between supermarkets, all of their suppliers, and the whole supply chain, to be cleaned up.
We’ve made submissions to the Senate Select Committee on Supermarket Prices and to the Food and Grocery Code of Conduct Review, and the Australian Competition and Consumer Commission has also commenced an examination of the pricing practices of the supermarkets and the relationship between wholesale, including farmgate, and retail prices – our submission to them is due in early April.
The Food and Grocery Code of Conduct is voluntary, which means it isn’t applied properly nor enforced, so in our submissions we’ve been saying it should be mandatory, like the dairy code. We’re also urging that margins up and down the supermarket supply chain need to be monitored.
We discovered during our submission research that processors are terrified to raise complaints or problems with supermarkets, because they fear retaliation, so we’ve also urged that retaliation needs to be directly addressed in these reviews. Because we know the processors, and many other supermarket suppliers, won’t raise bad behaviour in their submissions to these inquiries for fear of retaliation, we have made a point of doing that work for them. If the retaliation issue is addressed, arising from any of these supermarket reviews, we would expect that the dairy code and industry will see the issue similarly addressed for dairy farmers.
By Mike Smith, eastAUSmilk Government Relations Manager
EastAUSmilk Strengthening Representation in NSW
A Longtime Dairy identity, Tim Bale, from Stewarts River NSW has joined the board of EastAUSmilk.
Tim brings to the board over 40 years of experience in the industry and 30 years on his own dairy farm near Taree NSW.
After graduating from Hawkesbury Agricultural College his first job was on a large dairy followed by 15 years as a Dairy Livestock Officer with NSW Dept of Agriculture.
The main goal was always to be a farmer and with wife Julie bought their current farm at Stewarts River in 1993. Tim also worked as a private consultant for some time.
When deregulation hit there was a mass exodus of dairy farmers especially on the coast of NSW and Tim felt the need to do something. The Taree Collective Bargaining Group was formed, and years of negotiation followed, sometimes positive and sometimes negative but never wavering.
When asked why, Tim said he always thought farmers needed a voice, but most were reluctant to speak so he had the ability and felt responsible to make a difference.
These years of negotiating led to direct supply to Woolworths of the Farmers Own brand now rolled out around Australia. Tim and Julie now milk around 300 cows, predominantly Holsteins, and continue to stay on a pasture-based system.
When asked what he can bring to the board Tim says, I still have a keen passion for the industry and enjoy helping people especially farmers, our industry has been in decline, and we have to reverse the trend.
We need to bring back the younger people and instil confidence in the future.
We also need to support the older farmers with options and generally improve their lifestyles.
Tims early main focus will be on membership particularly in NSW, it is critical that EastAUSmilk is seen as the voice for Dairy farmers in NSW and Queensland and a large membership will ensure just that.
By Tim Bale, eastAUSmilk board member
The Present and Future for eastAUSmilk
As the son of a dairy farmer, I was brought up with an awareness of the day-to-day issues affecting this industry. From when I was able to attend our local branch meetings, I have always been actively involved in our organisation. Firstly, as a member, then delegate, branch president, district councillor and board member to now president of eastAUSmilk.
I enjoy being actively involved and hopefully at the end of the day I am helping make a positive difference for our dairy farmers. One thing that I do know for certain is that if we don’t have organisations like eastAUSmilk, to fight on our behalf, our dairy industry would be in a seriously worse off state. Whether it was the dollar a litre fight with the supermarkets or the now compulsory dairy code of conduct we have in place, or the many week to week issues that our organisation fights on our behalf. For example, just recently the Processors organisation has been approaching the government saying that the Dairy Code of Conduct needs to be substantially changed to allow them to reduce the price paid to farmers. Also, with the recently announced government enquiries into the supermarkets, we as farmers (not just dairy farmers) know very well the problems with trying to get anything near a realistic price for our products under the current system.
As President, I am often told that it is my task to talk the industry up. My response is fairly simple. If us as dairy farmers, are making a real sustainable living on our farms and (God forbid) even a return on our investment, that is when the industry will talk itself up.
In Australia, total milk production peaked a number of years ago at just under 12 billion litres. This year the forecast is around 8 billion litres. Australia is now a net importer of dairy products. I repeat, Australia is now a net importer of dairy products. If these facts and figures don’t bring a reality check to government and consumers, I don’t know what will. The government and banks especially need to rethink how we can finance young people to get them into the industry. If they genuinely want a dairy industry, then their approach and response need to change dramatically.
I would encourage all dairy farmers, if you are not already, to become members of eastAUSmilk, so that we can work positively together for our industry.
By Joe Bradley, eastAUSmilk President
eastAUSmilk FNQ Trip
Last week the spotlight shone on the FNQ dairy industry, showcasing its strengths and drawing attention to aspects which do not allow it to expand and flourish. The whole board of eastAUSmilk, their CEO, Eric Danzi and Government Relations Manager, Mike Smith, their staff and the President and CEO of Australian Dairy Farmers, Ben Bennett and Stephen Sheridan had the privilege to meet, visit and discuss the future direction of industry with the local dairy farmers. The team visited 10 local dairy farms to gain an insight into dairying in the tropics and the challenges it brings. Dinners were held giving the farmers a chance to meet and chat with the board, staff and ADF delegates. EastAUSmilk staff were able to assist with applications for the disaster recovery grant from the effects of Cyclone Jasper, resilience plans for the Drought Preparedness Grant and the opportunity of the On Farm Connectivity Grant. FNQ local dairy farmers support and enthusiasm was outstanding. Our visitors were also able to visit some of our renowned tourist spots and marveled at the picturesque Atherton Tablelands countryside and hospitality.
Geographically, Far North Queensland dairy farmers are isolated. With a yearly average above 1.2 metres rainfall with high humidity and one major processor, our isolation means that on all our inputs there is a freight component (about 25% above SEQ prices). This automatically has an impact on the cost of production/ profitability, herd fertility, lameness, incidence of clinical mastitis, increased SCC which all put increased pressure on production, herd management and milk pay bonuses. It cannot be emphasized enough that dairying in the tropics is like dairying in no other area.
Milk production and farm numbers have continued to decrease over the last 3 -5 years. Factory intake has decreased year on year of around 4 million litres annually and our farm numbers are down to 35. Supply to our local markets is short for significant periods of time throughout the year. This shortfall has been made up by shipping milk from Victoria and when it allows South East Qld. Putting in place a new milk system to allow FNQ farmers to produce this shortfall profitably has fallen on deaf ears. Remembering our area once produced 135 million litres annually with the longest milk run in the world, we have the capacity and knowledge to make up the difference if it were profitable.
Like everywhere else in Australia, competition for land use is high. This translates to large increases in land values. Competition in FNQ has come from beef production, other horticulture/tree crops, FIFO mine workers investing and retirees looking for lifestyle. When dairy farms leave the industry rarely do they come back as dairy farms and the opportunity for young farmers to purchase or lease farms is very limited.
Whatever the solution is to FNQ’s decreases in production and farm numbers it has to be recognized that dairying in the tropics has challenges, freight has a huge impact on profitability and if farms are profitable, farmer perceptions of our industry will have a significant impact.
Paul Newland, eastAUSmilk Board Member
eastAUSmilk Board and Staff visit FNQ
On the 5th of February, the eastAUSmilk board and staff travelled to Far North Queensland to visit our members in Malanda, Milla Milla and Atherton as part of the semi-annual face-to-face board meeting. We spent the week visiting a number of farms and engaging with members, including several dinners with excellent turnouts.
Due to the recent impacts of cyclone Jasper, eastAUSmilk staff were also able to assist with applications for the disaster recovery grant, which can be used to help rebuild damaged roads, laneways and fences, as well as clean up and replace machinery. We were also able to assist with more resilience plans for Drought Preparedness Grant applications.
In total, the majority of the board visited 8 farms, discussing the diversity and challenges of dairy farming on the Tablelands, which differ significantly from other areas. All of the farms have a unique way to combat their challenges, and it has been most interesting to see the methods behind each. While it is a high rainfall area, the soil does not readily hold moisture, and this also brings its own challenges such as maintaining accessible laneways and additional care being required by the cows themselves.
While we unfortunately couldn’t visit everyone, it was fantastic to catch up with most of our members over the four dinners we had during the week. These were spread between regions to be convenient for each region. With an average of 40 in attendance at the first three dinners, representing the majority of eastAUSmilk members, there was some great discussions on a wide range of topics.
We appreciate the hospitality of all our FNQ members for making the week such a great success and hope to be able to return soon.
By Letisha Johnson, eastAUSmilk Project Officer
Farm Business Resilience
EastAUSmilk has been assisting our members in creating ‘Farm Business Resilience plans’ and applying for the subsequent Drought Preparedness grant which offers up to $50 000, or 25%, towards new permanent infrastructure to help improve drought resilience. Some of the recently approved projects include drilling bores, installing tanks, troughs, and irrigation, as well as feed storage such as haysheds, silage pits and commodity sheds.
The Farm Business Resilience Program has been on offer to Queensland farmers since 2022 and has seen a considerable uptake of farmers applying for the drought preparedness grant. While 25% does not seem to go far towards something like a centre pivot irrigator, which will currently set you back the most part of $200 000, it is of great benefit to anyone already planning to implement an eligible project. EastAUSmilk’s goal within this program is to limit the amount of paperwork that our members need to complete by themselves and assist with the applications as much as required to ensure as many of our members as possible have access to this funding.
Our contract for this project is set to run out at the end of June this year, however the grant will continue to be available as long as there is funding behind it. We have continued to have good uptake of the project with 18 farms involved between July and November 2023, and 7 to date since then. Not all of these farms have applied for the drought preparedness grant, but have completed resilience plans which can assist in providing an overview of the business as well as being a step ahead for any future grant applications through QRIDA, as the majority of grants will require a resilience plan on application.
Now is a great time to think about completing a farm business resilience plan, whether you are interested in applying for the drought preparedness grant or not, there are plenty of other benefits to having one on hand. Drought Preparedness applications must be approved before any project can be commenced and this includes paying for materials or equipment, however, applicants are able to pay a deposit if necessary.
By Letisha Johnson, eastAUSmilk Project Officer
Dairy Code Review – Farmers Urged To Make Submissions
Department of Agriculture, Fisheries and Forestry has announced commencement of preliminary consultation on the coming review of the Dairy Industry Code, and eastAUSmilk is urging dairy farmers to make a submission before the 15 March deadline.
Information about the consultation process can be found here https://haveyoursay.agriculture.gov.au/industry-comments-on-the-operation-of-the-dairy-industry-code. You can download a discussion paper, and 8 focussed questions, from that web page.
eastAUSmilk has warned farmers this is a narrow consultation, focussing on eight issues of concern raised in the first (2021/22) review of the code by DAFF, and not all of their concerns can be addressed this time around. Those eight issues are reflected in both of the downloadable documents.
While many dairy farmer concerns can be raised in the context of these eight questions, not all can be. eastAUSmilk’s submission will make clear that consideration of a narrow range of issues, based on feedback in 2021, is not a good enough review of the code a further three years down the track.
eastAUSmilk is concerned that, somehow, DAFF came away from the 2021/22 review claiming everything was generally satisfactory with the code, and seem to have been unaware of the many and widespread concerns of eastAUSmilk members. Certainly, since that review, many other concerns have been raised with eastAUSmilk by members.
Included on the list of issues to be raised are the need to make suppliers a secured creditor, control or prohibition of milk swaps by processors which are used to undercut pricing, minimum price for later years needs to be at least the year one price, further barriers to processor collusion, final contract terms rather than initial terms need to be made public.
Individual dairy farmers are urged by eastAUSmilk to have their say via the above feedback page, and also to let eastAUSmilk know what concerns have been raised. Anyone making an online submission will be emailed a copy of their submission, and that can be forwarded to Mike@eastAUSmilk.org.au.
Mike Smith, eastAUSmilk government relations manager
Milk prices and dairy code
Now we are into January, everyone in the dairy industry will start to focus on what will happen to milk prices in July. The dairy code requires processors to publish preliminary prices and contracts by 1 June and some will make announcements well before then. And speculation will increase in the coming months as both farmers and processors try to feel out what will happen.
There has been a lot of complaining by some processors and processor representatives about the dairy code and milk prices. Some media commentators, claiming to present a professional view, have simply repeated the views of some processors and their representatives.
They claim the Dairy Industry Code is distorting the market and forcing farmgate prices too high. That’s simply not true.
The Dairy Industry Code has corrected some of the market failures in the dairy industry and gone some way to ensuring farmgate prices reflect competition for milk. That is about supply and demand for milk across Australia and within each different region. When the supply of milk reduces, as it has so significantly in recent years because of significant cost increases, the price would logically go up. Processors willing and able to pay more will attract milk. Those not willing to pay more lose milk to their competitors and will face a shrinking business. It’s all pretty simple, really. Some in the industry don’t seem to understand these economic basics, although most farmers do.
What would happen if some processors, and the media who parrots their views, got their way and milk prices fell by $2/kg or around 15c/L?
Disaster! There would be absolute carnage and milk production would probably halve across Australia in a few years. Is that the outcome that some processors want, or do they think farmers are magicians and can continue to produce milk while losing money?
Like it or not, the Australian dairy industry has contracted massively over recent decades, as a result of income being stripped from farmers. It is now an industry largely focussed on domestic demand and increasingly on domestic fresh milk. It is time for all to recognise this and stop living in the past.
Eric Danzi, CEO eastAUSmilk
Commonwealth Program Working for Dairy Farmers
Dairy farmers in New South Wales and Queensland are making good use of a new Commonwealth technology subsidy program. The On Farm Connectivity Program will subsidise dairy farmers (and others) to take advantage of connected machinery and sensor technology, up to 50% of the cost. Up to $30,000 can be claimed by each farm business.
Queensland dairy farmers Karen and Gary Wenzel have been funded under the program, and love it. He says he’s invested $40,000 in smart collars, with 50% of the cost covered by the new program.
Karen and Gary intend to use the collars to manage their artificial insemination program, but also to remotely monitor cattle heat, and the health of individual beasts and the herd.
They said making the purchase required very little effort, just a discussion with the collar supplier, Semex, and are urging their fellow dairy farmers to take up the opportunity.
Farmers must purchase through approved suppliers, only, and suppliers will complete the application and forward it to the Government, on behalf of each producer.
EastAUSmilk is aware of other dairy farmers with similar positive stories to tell.
Project guidelines set out a long list of products which can be purchased, and including livestock monitoring technology such as smart tags and collars, and many other things as well including drones and smart gates. More details are here at On Farm Connectivity Program including program guidelines and lists of approved suppliers.
EastAUSmilk urges dairy farmers to make an application as soon as possible: when the bucket is empty the program expires, so farmers need to get in right away! We checked in with the Government just before Christmas and there were still program funds available, but the Government says it is a one-off program and the only chance for this kind of subsidy.
Interested dairy farmers should contact Semex or eastAUSmilk for more information.
Mike Smith, eastAUSmilk Government Relations Manager
EastAUSmilk and Government: 2024
EastAUSmilk’s engagement with governments will be just as active in 2024 as it was in 2023.
We need to make sure the Commonwealth and the states fulsomely implement the recommendations of the Food Security Inquiry and commit to a dairy industry package that builds sustainable incomes and milk production.
Early in the year we’ll be making a submission to the Senate’s inquiry into the misuse or market power by major supermarkets, and making clear that many of the problems in the dairy industry are based around supermarkets undermining industry viability.
Queensland will have an election on October 26, and we’ll want all parties to commit to policies and programs which build dairy industry viability. We’ll hope to see a taste of that in the 2024 Queensland State budget, too, and an acknowledgement of the issue from New South Wales and the Commonwealth.
During 2024, we expect the Commonwealth to start the process of reviewing the Dairy Industry Code, and we will be advocating major and urgent improvements.
New South Wales has a Dairy Industry Plan, and we will continue discussing the need for such a plan across Queensland’s dairying industries, with the Queensland Government, as we also discuss the Northern Dairy Industry Plan with both New South Wales and Queensland governments.
EastAUSmilk has already made a submission about the Queensland State budget 2024, and we will be doing the same for the Commonwealth and New South Wales.
We might have had a reprieve from drought, but we need to press those three governments about the deficiencies in their respective drought programs.
Bobby calf/dairy beef solutions remain a priority in our engagement with all three governments, and we’re awaiting feedback on recent proposals.
We’re hoping current negotiations with the Queensland government, to facilitate on-farm tech training and uptake bear fruit early in 2024.
… and early in 2024 eastAUSmilk will engage with the Commonwealth to ensure they adopt the recommendations of the Commonwealth Parliament’s Food Security report, and implement them properly – particularly the rescue package for the dairy industry.
Mike Smith, eastAUSmilk government relations manager.
EastAUSmilk and Government: 2023
It's been a busy 2023, and a challenging environment, for eastAUSmilk’s relations with governments. March saw a Labor Government in New South Wales, and a new Agriculture Minister in Tara Moriarty. Federally, Labor started 2023 still early in their term, their first time in Government since 2013. In Queensland, the Labor government started and finished the year thinking closely about the October 2024 State election – fortunately the reshuffle under new Premier Miles saw stability with Mark Furner keeping the agriculture portfolio.
We’ve engaged actively with all of the relevant Ministerial offices, and hosted Queensland Minister Furner on a dairy farm visit, and Commonwealth Treasurer Chalmers and Minister Watt likewise.
During the year, eastAUSmilk has dealt with, or continues to deal with dozens of issues:
We’ve made strong representations about beefing up the Dairy Industry Code.
EastAUSmilk supported the prohibition of unfair trading practices in a submission to the Commonwealth.
Coles’ proposal to acquire two Saputo processing plants saw us raise many concerns with the Commonwealth, New South Wales, and Queensland governments, and we will continue.
We’ve discussed the failed implementation of the National Dairy Plan’s priority number one – major industry reform – with those same governments and will continue to press them.
Our immediate past President has been very involved in development of the Norther Dairy Industry Plan, and we’re continuing to engage with the New South Wales and Queensland governments about it.
EastAUSmilk was very disappointed there was nothing much for dairy farmers in any of the Queensland, New South Wales, or Commonwealth budgets in 2023, and we’re looking for better outcomes in 2024.
We’ve pressed those three governments about the gaps in their respective drought programs and come up against a lazy economist’s’ response time and again, that coping with drought should be part of normal farm business, and farmers shouldn’t need government support.
Bobby calf/dairy beef solutions have been on the agenda for just about every discussion with government, and we’re awaiting feedback on research proposals.
EastAUSmilk has pressed governments to facilitate technology uptake by dairy farmers, and there’s currently a Commonwealth government program offering just that, and negotiations with the Queensland government too.
We opposed the Commonwealth’s ridiculous Biosecurity Protection Levy, and the New South Wales government’s slashing of Coastal Harvestable Water Rights.
And just as the year ended, two things:
The Commonwealth Parliament’s Food Security report landed, proposing a rescue package for the dairy industry – we’ll be looking for the government to adopt the report and recommendations, and implement them properly.
And, the Senate has initiated an inquiry into the misuse or market power by major supermarkets – we’ll need to make a submission by February 2024.
Mike Smith, eastAUSmilk government relations manager.
Joe Bradley the new eastAUSmilk President, Tim Bale and Waylon Barron Vice Presidents
Joe Bradley was recently appointed to replace Matt Trace on the eastAUSmilk board. He also took over Matts position as president of eastUSmilk. Tim Bale and Waylon Barron were both elected vice presidents.
Matt has left the eastAUSmilk board due to potential conflicts it would create in his new role on the Australian Dairy Farmers (ADF) board. This is unfortunate but understandable. Matt has done an outstanding job as president of eastAUSmilk, and it has been impressive to watch Matt grow and develop his statesmanlike approach in the role of president and chair.
Matt will be lost to the board of eastAUSmilk but will be very useful to eastAUSmilk and our dairy farmer members in his new role at ADF. Anyone who knows Matt is well aware that he is a determined person who loves a fight and will be forthright and strategic in achieving outcomes for dairy farmers.
EastAUSmilk is very lucky to be able to replace Matt with Joe as president. Both are extremely capable and determined leaders who are passionate about dairy farming. I’m sure that Joe will do a fine job as president of eastAUSmilk. Joe is from Dayboro just north of Brisbane and is a person I have looked up to since joining the dairy industry and have regularly sought his advice and assistance. This is another occasion where Joe’s leadership was needed, and he is willing and able to step up.
Tim Bale is from Stewarts River near Port Macquarie in NSW. Tim has recently joined the eastAUSmilk board but has immense experience in many roles both within and outside the dairy industry. He is well known for central to the establishment of the farmers owned brand with Woolworths. Tim’s experience and knowledge will be invaluable to eastAUSmilk as vice president.
It’s also great to see Waylon Barron step up as vice president. Waylon is from the darling downs region in Queensland and is one of many dairy farmers who have become involved in eastAUSmilk over the past 6 years. He started on the darling downs district council, came onto the board just over 2 years ago and now has stepped up as vice president. Waylon is a very switched on and respected dairy farmer who I’m sure will adapt quickly to the role of vice president.
Congratulations to Joe, Tim and Waylon.
Eric Danzi, CEO eastAUSmilk.
Saputo acquisition by Coles
As reported previously, eastAUSmilk and other players in the dairy industry, have made multiple submissions to the Australian Competition and Consumer Commission urging that they attach conditions to the acquisition by Coles of two Saputo milk processing facilities, in Laverton (Victoria) and Erskine Park (New South Wales).
Our concern was twofold – one, that an integrated supply chain would give Coles unprecedented powers, and two, that the acquisition could, over time, substantially reduce competition for fresh milk, to the detriment of farmers. eastAUSmilk made it clear the industry needs more milk processor competition, not less.
As well as with ACCC, eastAUSmilk has repeatedly raised these issues with Commonwealth, New South Wales and Queensland governments.
ACCC initially released a Statement of Issues in July 2023 identifying preliminary concerns about Coles’ bargaining position in the dairy supply chain, and the potential for reduced competition for raw milk.
The ACCC has now rejected the proposition that the acquisition would reduce competition, and that they need to intervene. No conditions have been placed on the acquisition. The scope for ACCC to intervene was always narrow, restricted to the marginal impact on competition of the acquisition, and issues such as the community having ongoing access to locally sourced fresh milk, regional community resilience, fairness between big business and small, and so on, cannot be considered by ACCC.
On Wednesday 6 December, eastAUSmilk CEO Eric Danzi, and Government Relations Manager Mike Smith, discussed the Commission’s conclusions with ACCC Deputy Chair Mick Keogh.
ACCC concluded the acquisition is unlikely to result in a substantial lessening of competition over the next 5 years, and noted Coles’ conduct with dairy farmer suppliers is covered by the mandatory Dairy Code of Conduct and their interactions with processors is covered by the voluntary Food and Grocery Code of Conduct. They use the 5-year timeframe because they cannot predict industry conditions further ahead than that, with sufficient confidence.
They will release a statement of their reasons, probably early in the new year. eastAUSmilk will consider if there are further options open to us, to protect dairy farmers from negative outcomes of the acquisition. We hope other processors can use these developments to increase competition for milk supply, in the Sydney region.
Mike Smith, eastAUSmilk Government Relations Manager
Are Dairy Farmers Still Droughted?
eastAUSmilk has been chasing public servants in the Commonwealth, New South Wales and Queensland governments, and their Ministerial offices, to stress drought issues and drought response inadequacies.
This week, there’s good drought news for dairy farmers in most parts of Queensland and New South Wales. Tim Bale, near Taree, says the rain is ideal and “it’s a late spring”; Paul Newland in Malanda says everything has turned green overnight; Waylon Barron, just south of Toowoomba, reports widespread rain has stimulated furious summer planting; Kay Tommerup, near Beaudesert says her pigs will need to learn to swim.
With recent good rains, city dwellers may be mistaken and think all is now great for farmers everywhere, but they would be wrong.
Our members are cautioning that while recent widespread rains are a welcome relief, not everyone has had enough rain to make a difference. Most are also saying that without decent follow-up rains in the next couple of months, any pasture or feed growth promoted by November rains will be too limited to make a great difference.
In many cases, watercourses have flowed only a little, and dams have not filled, which means irrigation water access may not be much improved.
Every bit of advice from the experts says farmers must plan for drought and build their resilience. Our members have been investing time and money in their drought planning, and have incurred costs, along with the stress of a very dry 2023. While few had begun actively destocking before the rain, many had been letting herd size shrink, opting to keep numbers low, and trying to source feed to see them through the summer. Most have been unable to grow fodder to see them through to winter rains, and will still have to buy feed to supplement whatever they can now grow following November’s rains.
Feedback from members is making it very clear that circumstances are very different from region to region, and between localities, which makes it important that government policymakers are stopped from trying to make policy on the basis of the overall or average industry situation.
eastAUSmilk is going to keep on talking with government at every level about the ongoing need to ensure policies and programs reflect a full understanding of the true and diverse circumstances of farmers, and the possibility that recent rains could turn out to be not a real reprieve, but false hope.
Mike Smith, eastAUSmilk Government Relations Manager