Australia’s total milk production is forecast to fall 7-9 per cent this year, a decline that comes on top of earlier falls. Less milk production on farms means fewer milk is available for processors to manufacture dairy products.
Some battling farmers continue to leave the land, frustrated at making no money as they battle drought and rising costs for key inputs including water, feed and electricity.
A number of industry groups, including those representing farmers and processors, have appointed Mr Brumby chairman of the industry review process, known as the Australian Dairy Plan. The groups’ aim is that the completed report delivers lasting, transformative change for the industry.
Mr Brumby said the dairy industry was a crucial contributor to regional economies of Australia and directly employed about 45,000 people.
I’m a great believer in dairy. There’s not many things that we produce and make in Australia any more and dairy is one of those.
John Brumby, chairman of the Australian Dairy Plan
He said the dairy industry plan had three core goals; the development of “a roadmap for an industry that will be more profitable right across the supply chain”, to make the industry more united, and make it more confident about competing at a local and global level.
“I’m a great believer in dairy. There’s not many things that we produce and make in Australia any more and dairy is one of those,” he told The Age and the Sydney Morning Herald.
“We produce the product, it’s called milk, and then we make it into lots of things. We keep it as liquid milk, but we (also) turn it into all sorts of other products. We manufacture it, we make something of it, we add value, we invest money in research and development to keep improving the range and quality of products and we export them all around the world.
“And they’re good healthy products with high protein levels. And in a world which is going to continue to grow, a population that’s going to continue to grow, a rising middle class, there’s going to be continuing demand for those products,” he said.
The Australian dairy industry has endured a tumultous period in recent years. Low prices paid to farmers, the decline and sale of what was once Australia’s biggest dairy processor Murray Goulburn, and anger and frustration among farmers towards supermarkets and some dairy processors have been features of the industry.
Recently, the “farmgate prices” paid to farmers for their milk have improved, but farmers say the benefit of better prices has been wiped out by rising costs.
“Many farmers, not all, but many farmers are facing huge cost pressures and they’re simply not profitable and they’re wondering why they took up dairy in the first place,” he said.
Dairy farmer Paul Mumford, president of United Dairyfarmers of Victoria, said the dairy industry was currently “in a horrible situation” and the need for the industry review was critical.
“There’s hope for us because we create one of the cleanest, greenest products in the world,” he said.
