Profit a priority

By Country News on June 17, 2016
  • Profit a priority

    Dairy Australia’s managing director Ian Halliday says the dairy industry will thrive with more investment.

Dairy Australia’s Pathways to Profitable Growth initiative was one of many items discussed at the 2016 United Dairyfarmers of Victoria conference by Dairy Australia’s managing director Ian Halliday.

PTPG, which emerged from discussions around industry growth targets, is a collaborative tool to underpin and inform regional growth and profitability.

It began its national rollout around two years ago, Mr Halliday said.

Mr Halliday discussed the PTPG’s constraints analysis, saying it was important to highlight limitations in order to reduce the barriers to the future success of the dairy industry.

The constraints identified through the PTPG were land availability, feedbase and climate, water, cows, finance, infrastructure and factories, and labour and skills.

However, some are more problematic than others.

``The biggest constraints issues we have are land availability, feedbase and, in some areas, water,’’ Mr Halliday said.

``We need to try to determine how we will get profitable milk growth.’’

He said Dairy Australia was working its way around the country to review the economic impact dairy had in every region to help with the review process.

``We will drill into assessments with regional areas and find out what the opportunities from a regional perspective are around growth.’’

Mr Halliday said Australian dairy regions could learn from the DairyTas dairy output extension project Into Dairy, which during the past few years has brought together stakeholders and government to raise $1.6 million to help drive profitable milk volume growth.

Between $2-3 billion had been invested across the entire Australian dairy in the past five years, Mr Halliday said, and he wanted this to continue and grow.

At the end of the 2014-15 financial year Australia’s milk production was sitting at 9.7 billion litres, Mr Halliday said, but forecasts have predicted this will drop by 1-2 per cent for the next 12 months.

Mr Halliday said this was an issue because Australia’s milk consumption had grown at a rate of 1.5 per cent in the past year.

Production issues were also problematic from an international market perspective, particularly in Asia, because there is more demand for milk product and the Asian market is questioning Australian dairy leaders about whether our industry can keep up with demand.

``We know we’ve got challenges with the Asian market.’’

However, Mr Halliday highlighted the strength within the domestic market as almost 65 per cent of Australia’s milk produce is sold domestically.

So far, the PTPG has forecasted a potential increase to 11.8 billion litres of milk by 2019-20, which will require an additional 396000 cows to herd.

While the PTPG has made other useful observations, Mr Halliday acknowledged there was still much work to be done.

 ``We don’t have the narrative developed well enough to have a cohesive conversation with the government … we need this initiative in place to tell us what our needs are.’’

By Country News on June 17, 2016

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