Industry Challenges

Markets are evolving

• Dairy is having to adapt to changing consumer preferences and competition from milk alternatives.
• Public expectations are changing and consumers are increasingly questioning food and the way it is produced.
• While the removal of quotas and export subsidies overseas has generated additional value in global markets it has also brought on more market volatility.
• Dairy imports have secured a greater presence in the Australian market on the back of a variable domestic supply pool.

Supply chain adjustments

• Processors have invested heavily on the back of clear opportunities for the Australian dairy industry – however they require more milk throughput to improve their efficiencies.

• Processor ownership structures have evolved from the farmer-owned cooperatives to private companies which has influenced their decision making.

• Australia is a major global dairy exporter however our relevance on global markets is being questioned on the back of reduced milk volumes.

On farm complexity

• The way we farm is becoming more complex in response to market, pricing and climate variability.
• A broader range of skills and knowledge are now critically important as farms expand, employ significant labour and need to manage the business in a more volatile operating environment.
• Farmer confidence has been challenged by drought and industry events.

Risk and volatility

• Australia has a more variable climate than our major global competitors.
• Risk management has become critical to manage the increased volatility in both input costs and milk prices.
• Input costs (water, feed, labour and energy) have become more variable on the back of volatile seasonal and market conditions.

Regional diversity

• The drivers of farm profitability  vary significantly by region and require different solutions to ensuring success.
• Farm consolidation is shifting our relationship with regional service providers and communities.
• Environmental pressures in some regions require farmers to adapt quickly, including diversifying and intensifying their enterprises.

Attracting and developing people

• There is a shortage of skilled labour at all levels in the dairy industry.
• Keeping skills and knowledge in the industry and encouraging farm succession is an increasing and critical challenge.

The prospects for the industry are bright but the pathway toward a better future will require concerted and sustained collective industry action. Dairy Australia is ideally positioned to play a key role in lifting profitability for farmers, rebuilding confidence in the future and facilitating industry stakeholders pulling together as a united force to address key challenges.