Brisbane region farmer Joe Bradley new eastAUSmilk president
After a lengthy journey in dairy advocacy, Queensland farmer Joe Bradley is the new eastAUSmilk president.
On the other side of the world in the Oval Office, one President Joe clinched the top job after a 50-year path to power.
In a rectangular milking pit north of Brisbane, another President Joe has reached the apex of dairy advocacy after a similarly lengthy journey.
Joe Bradley was recently appointed president of eastAUSmilk, a cross-state lobby group representing both NSW and Queensland dairy farmers.
Source: The Weekly Times, Alex Sinnott, 8 January 2024
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Supermarket inquiry: Nick McKim calls for farmer submissions
Dairy farmers and other primary producers are being urged to have their say on dealing with supermarkets ahead of a senate inquiry into the retailers.
Dairy farmers and other primary producers are being urged to contribute their stories to a senate inquiry into supermarkets.
The senator who spearheaded the call for the inquiry, Nick McKim, told The Weekly Times that farmer feedback would give a pertinent perspective to the parliamentary probe.
For the first time, a select senate inquiry will scrutinise the impact of market concentration on food prices and the pattern of pricing strategies employed by the major supermarkets.
Senator McKim said the inquiry would also assess the rise in essential item prices, whether advertised discounts were genuine, and retailer profits compared to producers.
“We want to understand whether the supermarkets are price gouging their customers,” the Tasmanian Greens senator said.
“In particular we want to understand whether the concentration of market power of Coles and Woolies is allowing the them to put up prices by more than they should.
“We’re getting a lot of contact from farmers who sell to the supermarkets who say they’re not getting a fair price.
“The $1 a litre milk period was a good example of how farmers have been hurt by the lack of supermarket competition in Australia. We want to hear from dairy farmers about their experiences with supermarkets and get a clearer picture of how they feel the retail sector has impacted their businesses.”
Alex Sinnott, The Weekly Times, 18 December 2023.
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Dairy Australia’s year in review highlights power, labour costs
Dairy farmers are battling costly expenses across the nation, but some states have been more profitable than others.
Victorian dairy profit margins have doubled in the wake of the 2016 clawback — but the cost of running a farm is galloping as well.
New figures from Dairy Australia covering the post-2016 era reveal a revival in fortunes for the beleaguered sector, with surpluses in most states hovering close to $4.00 per kg milk solids.
Victorian and South Australian farmers were the biggest winners last financial year, with an average surplus figure of $3.94 per kg milk solids.
NSW stood at $3.84, Queensland at $3.75 and WA at the back of the pack with a $3.49 per kg milk solids average in the 2022-23 season.
Victorian and SA farmers enjoyed the biggest surplus jumps between the 2016-17 and 2022-23 financial years; in the wake of clawback, they were barely making $1.50 per kg milk solids in profit.
Dairy Australia industry analyst Isobel Dando said record-high farmgate prices played their part in the pricing purple patch for the sector.
But a combination of surging power prices, labour costs and other input expenses eroded the gains somewhat.
“Farmgate prices were at record highs last season. What our figures have shown is that expenses were also very high last financial year,” Ms Dando said.
Released recently, the Australian Dairy Industry in Focus report goes someway to explaining why farmers continued to leave the sector despite strong prices, with a correlation between shrinking margins in 2019-20 and an exodus of primary producers.
“Everyone’s power bill is going up, many businesses have the issues with labour costs,” Mr Free said.
“Rates are an area where farmers in particular are also feeling pressure, along with those other price rises.
“The UDV wants the state government to do more to reduce the rates burden, it’s not the fault of councils alone.”
“Power bill prices aren’t going to go down anytime soon,” he said. “Running a dairy takes a lot of power, it’s not like a household, so that needs to be acknowledged.”
The annual review confirmed Australia’s milk pool fell to a 30-year low last financial year, clocking in at 8.129 billion litres.
Alex Sinnott, The Weekly Times, 23 November 2023.
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Dairy Australia: Australian dairy farmers returns $6.1 billion in 2022-23
Dairy farmgate returns hit $6.1 billion last year, after a 24 per cent jump, but higher costs are putting pressure on profits.
New data released by Dairy Australia today confirms the national farmgate figure edged close to $6.1 billion in 2022-23, a 24 per cent jump from $4.9 billion in the 2021-22 financial year.
The Australian Dairy Industry in Focus report calculated the average farmgate price at $9.80 per kilogram of milk solids, with a shortage of supply forcing processors to nail down supply.
Dairy Australia industry analyst Isabel Dando said the $6.1 billion farmgate value meant the dairy sector was the third largest rural industry nationally.
She said the vast majority of farmers reported that they made an operating profit, with profitability at an all-time high in some regions.
“We saw historically high farmgate prices over the 2022-23 season, driven by competition for milk supply among processors,” Ms Dando said.
“However, depending on the region, many farmers faced challenging seasonal conditions with floods in parts of NSW, Queensland and Victoria.”
The annual review confirmed Australia’s milk pool fell to a 30-year low last financial year, clocking in at 8.129 billion litres.
The last time the national pool was around that figure was back in the 1994-95 season, when it tallied at 8.2 billion litres.
“Roughly 20 years ago, the milk destined for export was about 50 per cent of all milk produced in Australia,” Ms Dando said. “Today, that export figure is about 30 per cent of all milk produced in 2022-23. That’s been a long-term shift.”
Alex Sinnott, The Weekly Times, 15 November 2023.
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Saputo seeks buyer for King Island Dairy
Saputo is seeking a buyer for its King Island Dairy operations, revealing it is seeking to offload its interests on the Bass Strait isle.
Management announced a “strategic review of its King Island Dairy facility in Tasmania” this morning as well as confirming an additional $27 million towards improvement projects across its sites in Victoria and Tasmania.
The review will consider a range of commercial alternatives, including a potential sale to a third party, with its 63 staff informed of the financial deliberations.
Saputo chief operating officer Leanne Cutts said the processor hoped to find a buyer for King Island Dairy soon.
“In making these investments and strategic decisions, we remain focused on maximising our return for every litre of milk,” she said.
“(This will) further enhance SDA’s position as a high-quality, low-cost processor in Australia.”
Saputo is also in the process of selling its Laverton and Erskine Park processing sites, subject to regulatory approval.
“As King Island Dairy’s historic roots are deeply embedded in the region, we hope to find a buyer for the facility to ensure the continued success of its renowned specialty cheese products,” Ms Cutts said.
“We recognise the potential impact any decision may have on the King Island community, especially our employees and dairy farmers, and we are committed to thoughtfully considering all possible scenarios before any decisions are made.”
Alex Sinnott, The Weekly Times, 8 November 2023.
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Dairy strike: Fonterra offers pay deal to United Workers Union
Dairy farmers are breathing a sigh of relief after the United Workers Union struck a deal with Fonterra.
Union leaders have declared a statewide dairy factory strike over, with a number of in-principle deals from processors on the table.
The United Workers Union hailed the deals with Fonterra, Peters and Saputo as a “cost-of-living pay increase,” with Lactalis also in the final stages of inking a tentative deal.
More than 1400 workers at 13 factory sites went on strike for 48 hours last week, the largest industrial action in the dairy sector since 1985.
Alex Sinnott, The Weekly Times, 27 October 2023.
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Milk tanker strike ends, but Saputo, Fonterra, Peters, Lactalis factory workers still out
Saputo’s Gippsland milk tanker drivers have returned to work, ending their 48-hour strike that began Tuesday at 3am.
Dairy Farmers Victoria president Mark Billing said some farmers had been forced to dump milk, but much of the impact had been offset by drivers and middle management from Western Victoria heading to Gippsland to help out.
Transport Workers Union state secretary Mike McNess said the strike action ceased at 3am today, with drivers due to meet Saputo representatives for discussion tomorrow morning.
Mr McNess has previously stated the dispute was over reasonable hours of work and job security, given Saputo’s recent plant closures and announcements of further plant axings.
Meanwhile 1400 United Workers Union dairy factory workers continue to strike at Saputo, Lactalis, Fonterra and Peters plants, which may soon be unable to store more milk, raising the prospect of processors having to dump on site.
The union is calling for a 15 per cent pay rise over three years, with specific demands of Saputo to confirm the future of its operations in Australia.
Alex Sinnott and Peter Hunt, The Weekly Times, 19 October 2023.
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Agriculture Minister Murray Watt calls for clarity over Saputo’s Australian future
Saputo need to be clear about which Australian factories it intends to shut, Federal Agriculture Minister Murray Watt says.
In a speech to Canadian investors last month, company boss Lino Saputo Jnr announced the processor intended to downsize from 11 to five factories in Australia, but did not stipulate which sites were earmarked for closure.
A spokeswoman for Saputo this week said: “At this time, beyond the previously announced SDA network optimisation activities, no decisions have been made regarding its manufacturing footprint.”
The announcement follows moves by Saputo to sell its Melbourne and Sydney processing sites to Coles supermarket.
The Australian Competition and Consumer Commission is examining the deal and recently push back a decision on whether to green light the transaction.
Alex Sinnott, The Weekly Times, October 12, 2023.
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Australian Dairy Farmers urge ACCC to block Coles/Saputo deal
In Short: The nation’s dairy farmer lobby says the ACCC needs to block Coles from buying two Saputo processing plants.
Australia’s competition watchdog needs to bite back at plans by Coles to acquire Saputo’s milk processing plants, the nation’s dairy farmer leader says.
Australian Dairy Farmers president Rick Gladigau has made an eleventh-hour plea to the Australian Competition and Consumer Commission to oppose the $105 million deal, with a decision set to be handed down next week.
He says the proposed supermarket takeover of the Sydney and Melbourne bottling plants will reduce competition in the dairy supply chain.
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Source: Alex Sinnott, The Weekly Times, 6 Sept 2023.
Global Dairy Trade: Global milk price falls through the floor
In short: China’s dramatic dairy diet has caused international trade figures to fall to levels last seen during the milk market’s 2016 meltdown. Overnight, the Global Dairy Index fell for a seventh straight trading session — but this time the plunge was particularly pointed with a 7.4 per cut to the headline figure.
JMI Wealth director Andrew Kelleher said the huge drop in the whole milk powder index was of particular concern for farmgate futures.
“The real issue is: How long prices stay this low?”
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Source: Alex Sinnott, The Weekly Times, 25 July 2023
Mandatory dairy code of conduct: Lactalis fined by Federal Court
Lactalis has been ordered by the Federal Court to pay a fine of nearly $1 million for contravening the dairy code of conduct.
The French dairy giant was today slapped with $950,000 in penalties for failing to meet some of its obligations in relation to the 2020-21 milk season.
In September 2022, the Federal Court ruled that Lactalis had breached the dairy code by publishing and entering into agreements that allowed the processor to unilaterally terminate an agreement in circumstances that didn’t involve a material breach by farmers.
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Source: Alex Sinnott, 25 July 2023
ACCC announces alterations to dairy code of conduct guidance
Australia’s dairy code of conduct guidance has been finetuned by the competition watchdog for its third test at the farmgate.
The Australian Competition and Consumer Commission today announced an updated guidance to the mandatory dairy code, which came into effect in July 2020.
Further detail has been provided by the ACCC on how processors need to publish their milk supply agreements and when they can terminate an agreement with a farmer.
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Source: Alex Sinnott, 28 April 2023
Opening dairy prices 2023-24: Farmers call for fair pricing
Farmers are concerned processors will use lowered international pricing as an excuse to cut opening prices below production costs.
Dairy processors are keeping their cards close to their chest as farmers anxiously await indications of the new season’s opening price.
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Source: Alex Sinnott, 12 April 2023
Plant-based milk: American senators join forces for Dairy Pride
US lawmakers from both sides of the political divide have joined forces to protect milk naming rights from plant-based rivals.
Extract:
"The Idaho senator told The Weekly Times that plant-based produce should not be able to use phrases like milk or cheese, which have a specific connection to the dairy sector. “Dairy is an essential and foundational part of Idaho’s culture and economy,” he said. “Products masquerading as genuine dairy are unjustly hurting these hardworking dairy farmers and confusing or misleading to consumers...eastAusMilk co-chief executive Shaughn Morgan said similar concerns over the rise in plant-based products using dairy phrases was of concern to Australian dairy farmers. “Dairy terms such as ‘milk’ should be safeguarded from misuse."
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Source: Alex Sinnott, 21 March 2023
Farm World Lardner discusses dairy-to-beef profitability potential
"Redirecting bobby calves into maturity for the meat supply chain is becoming more popular in both the dairy and beef sectors...
Greenham dairy beef and animal welfare manager Sarah Bolton said the panel discussed the need to balance economic and social factors when dealing with dairy to beef.
“What we need to see consistently, going forward as an industry, in order to sure up the dairy industry’s social licence to operate, is an ability to direct surplus calves into meat production,” Dr Bolton said.
“(That has to) be done consistently, year-on-year, but do that in way that isn’t harming the business from an economic perspective.
“The challenge is how to we balance economic viability and social acceptability of the way we manage surplus calves."
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Source: Alex Sinnott, 30 March 2023
Expert: Succession planning for dairy farmers takes care of business
Like any business, proper planning prevents poor performance. Hear from one expert explaining the winning formula for dairy farmers…
Dairy Australia figures show China’s appetite for Australian milk, cheese
More than a third of all Australian dairy shipped abroad last financial year ended up on Chinese supermarket shelves.
New figures from Dairy Australia confirmed 36 per cent of all exported dairy was destined for China in 2021-22, whether it was cheese to Chengdu, butter to Beijing or milk to Macau.
The new data comes as Australian Foreign Affairs Minister Penny Wong met with her Chinese counterpart Wang Li, the first such ministerial meeting since 2019.
Greater China tops the league table for the 2021-22 financial year, with 303,397 tonnes exported during the 12 month period.
Singapore was the silver medallist, taking in about a quarter of China’s tally, on 80,869 tonnes while Japan took out bronze on 69,963 tonnes.
Dairy Australia trade and industry strategy manager Charles McElhone said unlike some other sectors, Australian dairy had maintained a presence in Chinese retail and hospitality over the past two years.
Substantial tariffs on barley, seafood and wine were implemented by the Xi Jingping regime in 2020 after a diplomatic freeze with the Morrison Government.
“Our trade with China has been quite stable and demand for dairy remains strong,” Mr McElhone said.
“There are some challenges moving forward with regards to shutdowns and consumption within China as a result of domestic policies. However, there’s greater recognition in China of the role of dairy in the diet which is promising.”
Rounding off the top 10 included Malaysia on 63,600 tonnes, Indonesia in fifth place with 59,147 tonnes, the Philippines on 43,313, Thailand on 31,118, Vietnam on 30,325, New Zealand on 22,922 and Taiwan on 22,666 tonnes.
The Greater China figure includes Hong Kong and Macau, former British and Portuguese colonies respectively, which have enjoyed a degree of self-governance in the past two decades until Beijing subsumed control over the cities in recent years.
Australian dairy consumption down but profitability rises
Australian households are paying more for dairy but they’re buying less milk, butter, yoghurt and cheese.
New Dairy Australia data shows consumers are reacting to higher costs of living, particularly for food, by changing where and how they spend their money.
Consumer research commissioned by Dairy Australia and undertaken by NielsenIQ found 29 per cent of Australian households had stopped buying certain categories of food altogether, as inflation concerns bite consumer confidence.
However, Dairy Australia analysis manager John Droppert said that trend was not significant for dairy sales, although shoppers were increasingly opting for generic over branded dairy produce.
In the surveyed 12-month period to October 9, sales volumes declined for long-life milk (-2.7 per cent), butter (-1.2 per cent) and cheese (-2.3 per cent).
However, sales increased for fresh milk (0.3 per cent) and yoghurt (0.9 per cent) in the same survey period.
“The pandemic years (of 2020-21) changed the way Australians purchase dairy,” Mr Droppert said. “For some shoppers, they’ve kept those habits. Particularly for people who now predominantly work from home, they’re obviously buying less dairy in cafes and restaurants and buying larger volumes to consume at home.”
The Nielsen research found that with inflation concerns at the forefront of consumers’ minds, many Australians were opting to work from home more to save on travel and hospitality expenses.
Mr Droppert said generic dairy produce was likely to remain popular into the new year.
“We find that when people are concerned about the cost of living, they tend to buy more generic produce and that includes generic dairy,” he said.
“But they still will buy some branded produce as a treat, or more sparingly.”
Australian Dairy Farmers Corporation steps up farmgate price
With record farmgate prices, it was thought a step up wouldn’t happen this spring. But with five days to go, one processor is moving.
Australian Dairy Farmers Corporation have stepped up the price paid to its suppliers, one of the first processors to step up this season.
While late spring was often a period of price movement from Australia’s big three processors - Bega, Fonterra and Saputo - the 2022-23 financial year kicked off with record prices paid at the farmgate.
As a result, few had offered any change to pricing until today’s announcement by ADFC management.
Backdated to July 1, an average of $9.90 a kilogram of milk solids will be paid to ADFC suppliers across the 2022-23 financial year.
Segmented into six-month payment periods, the price paid stands at $9.50 a kilogram of milk solids between July and December 2022, while $10.30 a kilogram of milk solids will be paid from January to June 2023.
In early July, the big three processors offered unprecedented step ups in the first fortnight of the 2022-23 season.
At the time Fonterra, Saputo and Bega were all offering at or near a $9.40/kg milk solids average — about $2/kg higher forecasted figures in February and March.
Stephen Sheridan installed as Australian Dairy Farmer chief
Record dairy prices may look good, Stephen Sheridan says, but input costs are closing the milk profit gap.
Rising input costs are squeezing primary producers and processors, the new chief executive of Australian Dairy Farmers says.
Stephen Sheridan recently took over the reins as ADF’s top administrator, succeeding David Inall in the top job.
Mr Inall now serves as chief executive of the Master Grocers Australia group.
Ongoing flooding across northern Victoria and the Riverina would compound Australian dairy’s input-cost challenges, Mr Sheridan said.
The new chief executive will tour flood-hit regions in coming weeks, talking with farmers about government and industry assistance.
“The cost of inputs, whether it be workforce shortages, energy prices, fertiliser, electricity, gas for the processors,” Mr Sheridan said.
“Feed costs, which have been affected by the floods. All of that is impacting input costs and in turn impacting your profitability.
“So inflation and interest rates are a problem across agriculture, but particularly dairy, being so energy intensive.
“While we’ve got higher prices domestically and higher world prices as well as increased demand, that’s the positive side of the coin, you’ve got to take a wholistic approach that these input costs are really eating into profit margins.”
He is also a current director of Rural Financial Counselling Service Victoria and a former manager with the Australian Wheat Board.
Mr Sheridan told The Weekly Times that rising house prices in Sydney and Melbourne had given many jobseekers pause for thought.
He said a generational shift towards regional areas would help to counter-balance the rural-to-urban population drift of the 1990s and 2000s.
“You’re seeing young people seeing the value of agriculture. In the past few years, with better connectiveness, better technology, is making a shift to regional areas more attractive,” Mr Sheridan said.
“During the pandemic, many people saw the benefits of regional living. That’s a positive sign for agriculture but that’s not to say there aren’t labour shortages, there are, but we’re better placed in terms of population movement than we were only a few years ago.”
Mr Sheridan grew up on a mixed cropping and livestock property near Dubbo before completing a Bachelor of Agricultural Economics at the University of New England.
“I’ve worked in everything from quality assurance to supply chain management, acquisition, trading — it’s given me a good appreciation of the commercial drivers of agriculture.”