Industry competitiveness and profitability

Goal 1

 

Goal 1 Increase the future competitiveness and profitability of the Australian dairy industry

1.1 X% increase in the number of profitable dairy farms

In the past, and for this report, we have used the Australian Bureau of Agricultural and Resource Economics and Science (ABARES) data to inform our progress against our profitability indicator. ABARES data is based on dairy industry selected physical and financial estimates, by state. As we stated in 2015, a more meaningful measure would utilise multiple inputs to inform progress. Ultimately, profitability should be assessed in terms of cash, profit and wealth4.

For this report, we have continued to use the ABARES data until the newly launched DairyBase program is established and sufficient data is available to better reflect profitability on dairy farms. Our 2017 Progress Report will report on a suite of 3–4 indicators and metrics from Dairybase.

2016 performance: During 2015/2016, 50% of dairy farms were profitable based on a three year rolling average. The trend over time shows a marginal decrease from the baseline of 55% set in 2013 based on a three year rolling average to 2012/13 to our 2016 result, as shown in Figure 1. In 2016, the milk price stepdown had a significant effect on farmer profitability.

1.2 X% increase in the market preference for buying Australian dairy products, compared with our top 3 international competitors (NZ, EU and US)

2016 performance: At the time of compiling our 2016 report there was no appropriate measure for this indicator. In 2017, this indicator will be updated. In 2014/15 Australia’s global share of dairy trade was 6%.

1.3 Ensuring sustainability criteria (e.g. carbon, animal welfare, environmental impact) do not impede market access

2016 performance: At the time of compiling our 2016 report there was no appropriate measure for this indicator. Going forward, this indicator will not be included in our reporting.

1.4 Increase adoption of new technologies and innovative management practices within the dairy industry

2016 performance: This year 59% of dairy farmers reported making capital investments in 2015, a higher than expected figure than the 52% who previously said they were planning to make capital investments in next 12 months (NDFS 2015).

Approximately 49% said they were planning to make capital investments in next 12 months (NDFS 2016) — down from 52% who said they would do this in 2015.

The trend over time shows planned capital investments has remained relatively constant, whereas actual capital investment has increased over time

Provide consumers with greater choice and access to a variety of dairy products and/or ingredients to meet their specific nutritional needs

2016 performance: At the time of compiling our 2016 report there was no appropriate measure for this indicator. Going forward, this indicator will not be included in our reporting.