In a meeting hosted by Australian Dairy Farmers and Dairy Australia, farmers, manufacturers, government and industry representatives discussed the industry’s response to ongoing drought in the Murray Darling Basin and its broader impacts on the national dairy industry. Australian Dairy Industry Council chairman Allan Burgess said the industry had many reasons to be confident despite the drought.
“Demand remains firm and higher commodity prices appear to have reached a new threshold that will continue in the medium term.

“New approaches to farming have been recognised and adopted. There are significant regional challenges associated with water and feed availability and costs of inputs. While much of the drought’s impact has been in the Murray Darling basin, by necessity all dairy farmers have adopted efficiencies and risk management strategies due to higher input costs. 

“Despite this situation, dairying has continued to be an important contributor to regional economic and social infrastructure. For example, in 2006/07, the estimated value of dairy in the Murray Darling basin was $800 million. This supported jobs and services in the community to the effect of about $3 billion”, he said.

Dairy Australia’s Managing Director Mike Ginnivan said: “The industry has come together with information and services to support farmers in their individual business decisions.

 “Significantly, the meeting agreed with a balance of immediate response and longer-term initiatives to mitigate the impact of climate change, he said.

Ian Cobbledick a farmer from Nathalia said farmers had already moved from relying exclusively on rain-fed pastures.
“We now use a combination of feed and fodder systems, which increases our capacity to cope with variable conditions. Changing feed systems back and forth to cope with changing climate conditions is a fact of life for today’s dairy farmers that plan to stay in milk production.”

The meeting endorsed a coordinated approach to address the key issues facing farmers and local manufacturers involving the Department of Primary Industries Victoria, Australian Dairy Farmers and United Dairy Farmers of Victoria, Dairy Australia, Geoffrey Gardiner Foundation, the industry’s Regional Development Programs and dairy companies.

The industry has worked closely together to develop key initiatives to cover issues as broad as feeding systems, financial support, cash flow budgeting, herd management and risk management.

Ends
Background

Key conclusions from the meeting were:

• Drought effects will be significant with national milk production expected to fall by at least 5 per cent with a more severe fall in the Murray Darling Basin; 
• Dairy farmers are facing new cost structures and are reviewing the  viability of their farm systems including ways to manage future risk;
• Dairying remains an important contributor to the regional economic and social infrastructure of Australia. This applies equally to irrigated dairying (but industry recognises that future farm systems will be different);
• There is a need to focus research development and extension to ensure resilient systems that can adapt to climate variability; and
• A range of industry, company and farm level activities are being undertaken to support this future.  Industry is committed to act to support dairy farmers in making the best decisions for their farm business.

The following drought initiatives will continue to support industry:

• Extended support from the Federal Government under Exceptional Circumstances arrangements including special provisions for the Murray Darling Basin;
• New research, development and extensions initiatives including:
o  innovation in the use of grains and concentrates via the Grains2Milk program,
o industry applications for innovation and investment in water use efficiency programs,
o proposed new extension programs to support the provision of information and decision-making during the current drought circumstance.
• Ongoing management of dairy industry programs such as Season Setup as vehicles to help farmers with decision making
• Continue to provide farmers with reliable, independent information with a weekly report on the availability and price of grain and hay.

Key statistics:

• Projected total milk production for 2007/08 is expected to be 9.1 billion litres – down 5 per cent on 2006/07.
• The value of dairy in the Murray Darling basin approximately $800 million with a multiplier effect of 4:1 gives an economic benefit to the community of $3.2billion.