Draft Australian Dairy Plan sets out initiatives to turnaround industry profitability, confidence and unity

6 December 2019

For the first time, the key dairy organisations representing the whole industry supply chain have come together to form a single national plan with an agreed vision for success, commitments and initiatives.

It is based on one of the largest consultation exercises ever conducted by the dairy industry including the views of over 1,500 people who took part in 25 workshops across Australia earlier this year.

The draft Australian Dairy Plan published today sets out a range of industry wide initiatives to restore confidence, lift profitability and stimulate growth. On the basis of modest growth projections, the Dairy Plan will support around 1 billion litres of additional national milk production annually by 2025, worth over $600 million per annum to dairy farmers. This additional growth will stimulate the creation of at least 1,000 direct new jobs, mostly in rural and regional areas.

A final version of the Australian Dairy Plan will be published in March 2020. It will include the recommendations of the Joint Transition Team on reform of industry structure and advocacy arrangements which will be released for feedback in January 2020.

Speaking at the launch of the draft Dairy Plan at a dairy farm in Gippsland, Victoria alongside Chairs of the Australian Dairy Plan partner organisations (Dairy Australia, Australian Dairy Farmers, Australian Dairy Products Federation and Gardiner Dairy Foundation), Independent Chair John Brumby said:

“This draft plan sets out a series of commitments, priorities and specific initiatives which we believe will help rebuild the profitability, confidence and unity of Australia’s dairy industry. Our economic modelling indicates that these proposals, if implemented, can add $600 million annually in extra value at the farmgate and help stimulate hundreds of new jobs in rural areas. The draft plan also focuses on initiatives to help farmers better manage the increased cost of key inputs like feed, water and energy to support the profitability of their dairy businesses.

“The industry has endured a perfect storm of challenges in recent years, with unprecedented market and climate volatility. Development of the Dairy Plan has allowed the whole dairy supply chain to regroup around a common set of priorities and objectives. Alongside areas for improvement, the Dairy Plan also highlights a number of fundamental activities are currently being well supported and these must continue to evolve.

“The extensive nationwide consultation exercise allowed us to identify common themes and I’m very pleased with the initiatives subsequently developed to support our five commitments for transformational change. We recognise an industry wide shift in how the industry thinks and talks about itself, and how it does business is one of the most important actions of the Dairy Plan.”

Key commitments and initiatives of the draft Australian Dairy Plan:

  • An historic reset of how farmers and processors work together to provide greater transparency and consolidated information regarding farm milk prices, as well as the establishment of a Milk Price Monitor.
  • New measures to drive a step change in on farm business and risk management by ensuring that by 2025, 100% of dairy farms will have completed effective business plans.
  • A renewed focus on attracting new people and investment, to build industry capacity and growth.
  • A major ramp up of industry marketing and promotion to build greater levels of trust with consumers and improve the value of dairy products.
  • A heightened focus on industry fundamentals to accelerate progress in innovation, market development, policy leadership and sustainability.
  • A more unified and strategic approach to collaborating with Government on initiatives to stimulate industry growth, reduce costs and remove barriers, in line with the Federal Governments 2030 goal of $100 billion in farmgate agriculture output. This includes working with Government on dairy initiatives that can be supported by the annual $100 million Future Drought Fund.

Dairy Australia Chair Jeff Odgers said: “The big investment we made in industry engagement and listening has enabled us to identify common themes and agree on priority issues to help reset the future direction of dairy. The draft Dairy Plan contains initiatives we believe can make a significant impact, including a whole of supply chain approach to a new national marketing and promotion campaign that can double the size and scope of our current marketing activities. There is a strong focus on attracting new entrants to the industry and assisting with skills building. The Dairy Plan process has also confirmed that we are doing many fundamental things well and we look forward to supporting the implementation of the final version of the Plan when it is published in March 2020.”

Australian Dairy Farmers President Terry Richardson said: “The draft Dairy Plan highlights the critical importance of dairy to our regional economies and farming communities. It contains practical measures for supporting the profitability of dairy farms and assisting farmers to navigate increased market and climate volatility. The future health of this industry is something we all have a stake in. We need to get value back into the market, so that dairy products yield a decent return for all parts of the supply chain. The report also has a focus on getting the culture of the industry right and rebuilding trust. We await the recommendations of the Joint Transition Team regarding industry structure and advocacy arrangements.”

Australian Dairy Products Federation President Grant Crothers said: “The decline of the national milk pool in recent times has been an increasing concern for dairy processing companies. Dairy processors have significant capital invested in the industry and assets which are currently underutilised and inefficient – this has a knock on effect through the entire system. We need to continue to work with retailers to get value back into the pricing of dairy and I believe some of the initiatives in the draft Dairy Plan around a whole of industry approach to marketing and promotion will support this. Processing companies are committed to playing our part in rebuilding trust with our farmers, through greater transparency around farm milk pricing.”

Gardiner Dairy Foundation’s Dr Bruce Kefford said: “I commend the efforts of everyone involved in the development of the Dairy Plan to date. No stone has been left unturned and every view has been considered. We have gone to great lengths to ensure full consultation, which has allowed us to identify and agree keys themes and priorities. I am optimistic that this plan can mark a new beginning for our industry. Meaningful industry change is possible if we all choose to work together and use the plan to set a new and positive direction for the industry that is supported and delivered by all. The partner organisations cannot do it on their own.”

To read the draft Australian Dairy Plan, visit the Key Documents page.

Media enquiries:

Alex Evans
03 9694 3829 I 0417 540 059 I media@dairyplan.com.au