Industry competitiveness and profitability

Sea port

 

The dairy industry is focusing on building resilience into our farm and manufacturing businesses in order to enable them to thrive in the good times and survive in more turbulent times.

The historic China Free Trade Agreement (FTA) reflects the international interest in our industry and presents a great opportunity for Australian dairy. We have secured improved terms of trade for our dairy products and the dismantling of tariffs over the next decade will see increasing volumes of Australian dairy products enter China. China is the largest world market and the China FTA should give the Australian dairy industry and external investors greater confidence to invest in growing their businesses.

The Trans Pacific Partnership (TPP) was finally concluded on the 4 October 2015 with modest, but important gains for the Australian dairy industry. The TPP agreement extended existing trade arrangements in key markets as well as forging access into new markets.

Dairy Australia has been working to help the industry become more profitable and develop appropriate metrics so the principles of profitability are better understood, encouraged and put into practice, including managing risk and volatility better.

In February 2015, the industry held a dairy investment workshop in partnership with Austrade and the State Governments to help streamline the discussion between the various state investment agencies on how to engage with the investment community on dairy issues. Dairy Australia also ran a pilot workshop exploring farmer “investor readiness” in November 2015. The aim was to help farmers better understand what they need to do in order to provide an attractive proposition for external parties to invest capital into their businesses.

Dairy’s investment in the Dairy Futures CRC, which began in 2010, is delivering innovations that benefit the Australian dairy industry. The CRC began with two major goals: to double the rate of genetic gain in Australian dairy herds and to create new tools that fundamentally change the breeding of pasture plants. By June 2016, other major research streams will deliver or exceed their projected impacts. The first hybrid breeding lines will deliver rapid gains for dairy pastures. Elite hybrid plants have been demonstrated to have a 20% increase in yield.

DairyBase, launched in May, 2015, is a web-based tool that enables dairy farmers to measure and compare their farm business and financial performance over time - year on year and season on season - as well as to undertake budget planning. It is simple to use and provides meaningful financial information that enables farmers to compare past performance and prepare budgets using industry benchmarks. Feedback across all sectors of the dairy industry has been overwhelmingly positive. By the end of the financial year DairyBase had accumulated over 300 registered users. And by mid-November 2015 the number had risen to 800.