Dairy Sustainability

WELCOME

An industry-wide, whole-of-chain approach

The Australian dairy industry is strengthening its commitment to sustainability – taking a practical approach to doing the right thing by people, our animals and our environment.

Our evidence of this commitment, the Australian Dairy Industry Sustainability Framework, led by the Australian Dairy Industry Council (ADIC) and supported by Dairy Australia, continues to evolve.

We have taken further steps in 2015 towards meeting the targets set in the inaugural Dairy Sustainability Progress Report (2013) and identifying areas that require further attention.

The content of the Framework is grounded in stakeholder consultation to ensure their needs and expectations are met. This principle continues to drive the Framework’s development and determines how we report on our progress.

Our work in 2015 has involved extensive and ongoing engagement both within the industry and with external stakeholders, including customers, suppliers, government and other primary industries, non-government and special interests groups, to gain their perspective on existing and emerging issues as well as priorities for improving performance. This consultation is helping the Framework evolve in line with changing stakeholder expectations.

Emerging issues such as labour practices, food waste and climate change are challenges the framework needs to consider, together with supply chain transparency, traceability and intensification.  To ensure the dairy industry is able to respond, these areas will be reviewed against the Framework targets and performance measures during 2016.

However, our immediate priority is to establish the outstanding targets and measures, appropriate baseline information and up-to-date performance data. We are also developing more meaningful metrics for several indicators and targets as we move beyond measuring perceptions of the impact of the Australian dairy industry, to a meaningful measurement of the value created by the industry.

It is this ability to measure our progress across the areas of enhancing livelihoods, improving the wellbeing of people and our animals and reducing our impact on the environment that will ensure we have a sustainable, prosperous industry well into the future.

We are proud to have made progress in some targets, with farmers and manufacturers continuing to take steps to improve nutrient, land and water management, and reduce consumptive water intensity, greenhouse gas emissions and landfill waste.

The dairy industry’s efforts in helping secure Free Trade Agreements with our major trading partners, China, Japan and Korea, will help increase our future competitiveness and profitability.

However, other targets, including reducing time lost to injury on farms and in the manufacturing sector, we have not progressed as well as hoped. We will continue our efforts to make progress in these important areas.

The Australian dairy industry is also proud to play its part in the global movement towards greater sustainability. This is a movement which aspires to meet the rising demand worldwide for all industries to manage their environmental impact and contribute to action on issues such as climate change, labour practices, animal welfare, health and wellbeing, and community prosperity.

The Australian dairy industry’s work on its Sustainability Framework was acknowledged with a Banksia national sustainability award in 2015. We are grateful for the wider community endorsement of our achievements so far, and invite you to read this report and actively encourage your feedback, which is taken very seriously. Your contribution will help us continue to progress and address the challenges we face.

Chris Griffin

Chair, Steering Committee, Dairy Industry Sustainability Framework

Simone Joliffe

ADIC is the peak industry policy body and the owner of the Australian Dairy Industry Sustainability Framework on behalf of industry.

 

 

About the 2015 Progress Report

As the Australian dairy industry has discovered the tyranny of choice accompanies a commitment to operate sustainably.

Sustainability is complicated and evolving.  It offers a dizzying array of challenges and opportunities.

Consideration is given to a broad range of emerging issues, stakeholder views and global events. The foundation upon which dairy farmers and manufacturers work towards sustainability regularly shifts under them.

During 2015 consultation with stakeholders raised new issues such as labour practices and on-farm intensification, and global talks led by the United Nations set new goals for sustainability (SDGs) and climate action (COP21).

These factors, in addition to growing concerns over the use of antibiotics and hormones in food production animals, the emergence of coal seam gas mining in dairy regions and the implementation of the Murray Darling Basin Plan (which will affect the amount of water farmers can use), have commanded the industry’s attention.

Together, these issues, views and events make sustainability more complex and raise questions about the priorities in the industry’s strategy for the sustainable production of dairy products. As a result, the industry has spent time considering the impact of these factors on the sector.

This is the reason why the industry did not establish baseline data for all 41 indicators in the Dairy Industry Sustainability Framework, nor, in some cases, set performance targets, despite a plan to do so in 2015.

Now, as a result of the shifting landscape, globally and nationally, a detailed materiality study and a review of all targets, indicators and performance measures will be undertaken during 2016. The findings will help industry stay up-to-date with what issues matter most to our stakeholders and how to prioritise them.

It is hoped this work will make the industry’s choice of issues, activities and outcomes clearer and, as a result, gaps in information about baselines, progress and targets for the most important indicators will be filled.

As for the industry’s progress during 2015 against those indicators for which baselines and targets have been established, there have been several areas of improvement, including:

  • The intensity of waste sent to landfill by manufacturers, which has dropped 46% since 2011, exceeding the target for 2020 several years ahead of schedule; and

  • The proportion of farmers with nutrient management plans, which at 58% is on-track to achieve the 2020 target of 80%, having almost doubled since 2013.

Yet, there are also areas where further progress is needed, such as increasing the proportion of dairy farmers who are aware of, and implement, the recently agreed (January 2016) standards for animal welfare. Currently, awareness stands at 56%, with our target for 2020 being 100%. There are also areas where the industry’s performance has declined, such as the proportion of people who recognise dairy as a quality product, which slipped to 69% from a baseline of 72% (the 2020 target is 80%).

However, one aspect of recognition where the industry won during 2015 is peer-recognition. The industry took out the Food for Sustainable Thought award presented by the Banksia Foundation.

Judges of Australia’s premier sustainability award praised the Dairy Industry Sustainability Framework, concluding it can be used across all industries and has the potential to influence the broader commercial market.

As the dairy industry has discovered sustainability presents many opportunities and challenges.  So, its approach during 2016 will be to prioritise those which are most significant for the industry and its stakeholders.

This will include consideration of how the industry can support Australia’s commitment to the United Nations Sustainable Development Goals and COP21, balance the contribution made by the farming and manufacturing sectors, enable continuous improvement throughout the supply chain and respond to continuing calls for evidence of our sustainability credentials.

As always, the task for the Australian dairy industry will be to take responsibility for making the right choices, finding ways to improve and measure performance and reporting progress in a transparent manner.

This is a responsibility the Australian Dairy Industry Council accepts on behalf of the industry.

About the Australian dairy industry

Through its farms and manufacturing sector, the Australian dairy industry not only provides nutritious food but is a significant contributor to the national economy.

Despite challenges caused by low rainfall and depressed global prices, the dairy industry remains Australia’s third-largest rural industry behind beef and wheat, with a farm-gate production value of $4.7 billion in 2014/15.

Our 6200 farms (approximately 97% family owned) produced 9.7 billion litres of milk in 2014/15, an increase of 3.8% on the previous year. However, seasonal conditions and tight profit margins will see a likely 2% decrease in production in 2015/16, according to Dairy Australia.

Compared to our annual total of 9.7 billion litres of milk, our neighbours in New Zealand produce 19 billion litres annually, while the USA produces 93 billion litres.

Australians each drink around 105 litres of milk, eat 13.5kg of cheese, 4kg of butter and 7.2kg of yoghurt per year. Our milk production more than meets our domestic consumption needs, and a large amount of dairy produce is exported. Australian dairy has an enviable international reputation, and 34% of our annual production is exported, particularly to South East Asia, Japan, China, Africa, the Middle East, Mexico, and Russia.

Despite such a large percentage our production sent overseas, and being the fourth largest dairy exporting country, our exports comprise only 6% of total world dairy trade exports.

The Australian dairy farming system is predominantly pasture. Our farmers are entirely dependent on their cows which can produce 25-40 litres of milk each day. Dairy has many challenges – for example, our farms use water and energy, and other materials like fertilizer and feed, while generating effluent and greenhouse gas emissions.

However, the same farms and manufacturing plants employ 39,000 people directly and more than 100,000 people indirectly through related services, including research and development, dairy transport and veterinary services. While most milk production occurs in the south-east states of Australia, all states have dairy industries that supply fresh drinking milk to nearby cities and towns. Much of the milk processing occurs close to farming areas, making the industry an important presence in regional communities, generating jobs and opportunities.

Industry snapshot

From Dairy Australia’s Australian Dairy Industry in Focus 2015:

  • National dairy herd – 1.74 million cows

  • Average herd size – 284 cows

  • Total milk production – 9.731 billion litres

  • Average production per cow – 5730 litres

  • Farms are predominantly pasture based with approximately 70-75% of dairy cattle feed requirements coming from grazing in a year of “normal” seasonal conditions

  • Supplementary feeding is widespread( predominantly grains, hay and silage)

  • Dairy: Australia’s third largest rural industry - $13.5 billion farm, manufacturing and export industry

  • On-farm carbon footprint: 1.11kg CO2/litre milk produced

  • Total Australian exports – $2.88 billion (6% of world dairy trade)

  • Percentage of milk production exported – 34%

  • Dairy industry workforce – direct employment of about 39,000

  • Dairy farms are 97% family owned and operated: corporate farms comprise 3% of farms and share farming is employed on approximately 18% of farms 

  • Major markets for Australian dairy products: Australia; Greater China; Japan; Singapore; Indonesia; Malaysia

  • Milk utilization: cheese (31%); skim milk powder/butter milk powder (27%); drinking milk (25%); whole milk powder (8%); and other products (9%)

    See http://www.dairyaustralia.com.au/Home/Standard-Items/~/media/Documents/Publications/Australian%20Dairy%20Industry%20In%20Focus%202015.pdf