Dairy Australia Chair Max Roberts answers a Milk Maid’s questions

June 19, 2012 / dairymilkmaid / 3 Comments

One of the dairy community’s most prominent leaders is Dairy Australia chairman, Max Roberts. Thank you, Max, for answering the Milk Maid Marian’s questions and a thank you in advance to those of you reading this who can fire some more questions in via the blog!

Max Roberts in his own dairy

MMM: Why are you a dairy farmer?
MR: In 1982 I had what many would call a good government job that said that I had to leave Bega and go to Sydney. Sue and I didn’t like that idea so we bought a dairy farm and have never regretted that decision. It had a few interesting moments with a couple of deep and meaningful conversations with the bank manager. Over time it has worked well for our family. It has given us a lifestyle we now enjoy, educated and given a good start to both the kids and we enjoy it.

MMM: What are the hot topics discussed by dairy farmers?
MR: This depends in what part of Australia you are in and we should never generically assume that one problem fits all. For example it could be water in the Murray Darling Basin, the supermarket pressure on domestic milk prices in the northern parts of our industry, the impact of drought or wet weather in other dairying areas. Milk prices will provide some common ground as will input costs and there may be a combination of the above issues dominating farmer discussion. It’s interesting to look at the last three or four outlook reports and the variation of emphasis placed on the varies topical issues.

MMM: What is not being discussed that should be?
MR: This is an interesting question and one that exercises our minds around the board table because DA needs to be ahead of the issues and not playing catch up. It will be interesting to see what comes back via your blog. One I would suggest is farmer succession but dealing with the issue from the older or grumpier end of the industry.

MMM: How would you describe the mood of dairy farmers at present?
MR: Dairy farmers are generally cautious in terms of sentiment. Our research shows the confidence levels among dairy farmers has remained relatively stable over the past 3-4 years. Confidence levels are currently around 66%. There is still a lot of rebuilding to do after the drought years of the past decade and we should not expect an instantaneous result from the better seasons that we have had.

MMM: What is the role of dairy farmers in the management of DA?
MR: DA is the service body of the dairy industry and therefore farmer involvement in what we do is essential. Farmer access to DA’s forward planning process is available through a number of channels. In no particular order they are via one of the eight RDP’s (Gipps Dairy, Dairy Tas, Sub Tropical Dairy and the five others) the state farmer organisations, the staff and directors of DA, the dairy company’s and the many dairy research facilities.

MMM: What are the biggest challenges and opportunities for the dairy community?
MR: The dairy industry is a producer of food and has a reputation second to none on the delivery of high quality foodstuffs especially as a source of protein. Food security is a growing international issue that creates headlines outside of Australia. There will always be demand for our product which creates the opportunity but the real challenge is at what price will that demand be at. We have to have farming systems and technologies that allows us to produce milk within the demand and price parameters . We also need resource policies that allow us to be profitable farming business’s. To have the right policies we need a strong farmer lobby voice to support the work of DA. So one of the key challenges is to have farmers involved in the future of our industry.

MMM: If you had a magic wand…
MR: My magic wand would iron out the volatility of milk pricing and input costs.

More questions for Max are welcome! Simply leave a comment.

John Mulvany tells how young dairy farmers can make it work

February 4, 2012February 4, 2012 / dairymilkmaid / 10 Comments

It’s official: buying your own dairy farm may no longer be affordable but some entrepreneurial young dairy families are finding other paths to prosperity.

The answer is to farm without the farm, says John Mulvany of OnFarm Consulting. Ahead of his address to the Australian Dairy Conference on Thursday 23 February, I invited John to write a guest post especially for young farmers.

All dairy farmers at the Australian Dairy Conference will be somewhere on this dairy farmer life curve: it’s about balance between skills acquisition, growth, life style and eventually discretionary involvement.

SA – Stuffing Around

FTCF – Focus, tight cash flow

TAF – Tight arse factor

HD – High debt

HEQ – High Equity Cons – Consolidation

DI – Discretionary involvement

Many dairy farmers are asset rich and energy poor. At the same time, many young dairy farmers are energy rich and asset poor. With land prices increasing while profit margins fall, landowners will find it harder to find young farmers capable of buying their farms.

Three young dairy couples I’ll introduce at the Australian Dairy Conference have taken their cue from many successful retailers: they don’t own the farm. Instead, they lease land to operate profitable dairy businesses while investing the returns from their dairying in high growth assets beyond the farm gates.

Warren and Kerrie Redmond, for example, entered the dairy industry with no assets in 1989 on a third share of 167 cows. Today, they lease just under 1000 hectares with 486 hectares milking area for 900 cows over three farms. Off-farm investments include three houses, FMD’s and shares. Last calculated return on asset was in 2010/2011 at 22%. Lifestyle is now very much a priority.

Gems of Advice for Young People in Dairy

• Keep an eye on the big picture – it’s easy to get lost and discouraged in the daily crap.

• There will be a minimum 8 -10 years where the pressure will be on and you’ll wonder if you are going anywhere.

• Build your reputation so people seek you to rent their assets.

• Keep your bank informed; they are your best friend when investing in high-risk cows and plant at the start.

• Spending is restricted to sensible money making assets – no shiny red toys.

• Purchase off-farm capital growth assets as soon as your debt level allows.

• You will have to make some sacrifices and initially be prepared to work hard manually while balancing decisions.

• In re-working arrangements, think outside the square, keeping the interests of both parties in mind.

How transparent should farmers be?

November 22, 2011 / dairymilkmaid / 2 Comments

There is no counter argument out there. Could it be because there is no humane practice?

Can’t take your word for it. You need to explain your practices and where your product goes. What happens to your male calves? Etc.

Show me! Tell me! I would like to keep consuming dairy.

The campaign against you is growing.

Honestly. I’m very open to being educated. It was an FYI. “You” = “dairy industry”.

One of your biggest hurdles is that like the cattle industry, u appear secretive. Transparency might be too late.

These tweets from a journalist with a self-proclaimed “love for our living planet and my opposition to her corporate destruction” has made an understandable choice: to believe a charity dedicated to the welfare of animals rather than an “industry”. Yes, although 98 per cent of Australian dairy farms are family farms where cows roam free, the perception is that we act as an industry in perpetrating animal cruelty on factory farms in the name of profit.

Why do I say it’s understandable? Do a little test to see for yourself. Google “bobby calf”.

Animal welfare organisations dominate the results. The people who live and breathe animal care – farmers – are missing. Our voices are not being heard.

I don’t really believe that Animals Australia campaigns will cause a noticeable drop in milk consumption because Aussies love to drink milk but these activists and their followers have worked hard to win the attention of policy makers.

Some of their views are valid, some are ludicrous, and some of the policymakers may well be swayed to adopt them. If we want to be able to operate farms free from a tangle of compliance or, worse, mandatory practices that are actually bad for animal welfare, we must learn from our detractors.

Animals Australia knows that science and logic do not resonate when it comes to animal welfare. Emotions quite rightly do because animal welfare only triumphs when the custodians hold the care of their animals close to their hearts. And because everyone knows that politicians are quick to follow popular opinion, we cannot be satisfied with lobbying in Canberra. We’ve got to tell the story like it is to anyone who will listen.

Tonight, Twitter forum AgChatOz will host a discussion on bobby calf welfare and other dairy practices. I will be there (baby bedtime permitting) and I hope lots of other dairy farmers will be too.

The casualties of the milk war still to be counted and breaking news says they will grow

November 3, 2011November 3, 2011 / dairymilkmaid / 4 Comments

Media coverage of the senate inquiry’s report on the milk war by Coles suggests there have been only victors but this only tells half the story, for every war must have casualties. Instead, my reading of the report is that the government feels there is not much it can do about the fallout.

Gobbledegook like this:

…the ability for processors to ‘walk away’ from negotiations with collective bargaining groups (as highlighted during the committee’s 2010 inquiry), market realities such as the number of drinking milk processors in some areas and the fact that the processors must deal with the two major supermarket chains that dominate the grocery sector, can mitigate the benefits of collective bargaining arrangements.

and this:

Much of this information, however, concentrated on concerns about shifts in sales away from the processors’ branded milk products to the discounted supermarket private label milk. As a matter of overall principle, these types of free market outcomes should not be a matter for government. Many private label grocery products have grown in share in recent years…It should not be a matter for public policy to protect brands that consumers no longer value. It also does appear that the steadily increasing sales of private label milk—which have more than doubled their share of sales in supermarkets over the past decade—is a trend that is unlikely to be reversed.

…actually means that dairy farmers are standing right in the path of the cross-fire as Coles and Woolies spray litres (or should I say “rounds”?) of discounted homebrand milk at each other.

On top of all this, there are news reports that private labels will soon occupy far more supermarket shelf space. It won’t be just dairy farmers in the firing line. All of Australia’s food manufacturers and producers should see this milk war as simply an opening salvo.

How ironic then, that the most articulate description of the milk war’s impact comes from Woolworths:

…this price move has effectively re-based the price of white of milk across Australia overnight, and for an unknown period into the future, which also potentially devalues the whole milk category in the eyes of the consumer. In effect, the consumer baseline for price is now at 1990s levels, but with 2011 input costs for all parts of the supply chain.

At least there aren’t white caps in paddock 17 today

July 19, 2011July 19, 2011 / dairymilkmaid / Leave a comment

Flooded paddock 17

Paddock 17 and part of 18 are underwater today but at least there are no white caps. White caps? Yes, the ones sailors dread on an angry sea were whipped up in paddock 17 a week ago. The waters have barely subsided since then and all of the three forecast models I follow on OzForecast.com.au are predicting lots more rain in the next few days.

I’m a weather geek at the best of times but now I’m now compulsive about checking the forecast. Almost all our ready-to-graze pastures are on the river flats across the gully, which is infamous for flash flooding. A big downpour on the range to our south would see the cows marooned. There’s no bridge – only a concrete fjord – and I reckon building one would certainly usher in a drought!

Seriously though, I know many dairy farmers are facing much tougher times than we are with this amazingly wet season. Good luck to those still struggling with floods. Our thoughts are with you.

Why good news in the budget for scientists is good news for dairy farmers

May 11, 2011September 3, 2011 / dairymilkmaid / 1 Comment

Much to my relief, the word is that the federal budget has not cut spending on agricultural research and development. Yes, ag R&D funding has been steadily eroded and needs to be restored but I was almost certain it would be slashed. Earlier this year, a review of the Rural Research and Development Corporation by the Productivity Commission flagged a dramatic reduction in funding for agricultural research.

Why do I care? Because we need to farm smarter all the time in order to make a living. The farm I run now bears almost no resemblance to the farm of my childhood 30 years ago. It’s the same 500 acres but we milk 50 per cent more cows and each produces around 55 per cent more milk than her ancestor did in the 1980s: a huge leap in productivity.

Although these numbers are impressive, we are far from exceptional. According to Dairy Australia, Victoria’s raw milk production peaked in 2001-02 at 7.4 billion litres – more than double the 3 billion litres produced in 1980-81. Yield per cow also increased from 3,012 litres in 1979-1980 to 5,864 litres in 2008/09.

We achieved these gains scientifically. Thanks to Target 10 and Feeding Pastures for Profit, we make much more effective use of our pastures, while programs like “Fertilizing dairy pastures” showed us how to grow more grass with the efficient use of valuable nutrients like phosphorous and nitrogen.

Today, we are learning how to cope with new challenges brought by climate change: how to keep cows cool, new more drought-resistant pastures and declining fertility.

We must also be realistic about the rise of new competitors. Developing countries including China, Mexico and the Middle East are buying record numbers of Australia’s breeding stock in an attempt to fast-track the growth of fledgling dairy industries. India is also racing to become a dairy giant.

Australian dairy farmers do not enjoy the support lavished on our northern competitors. We can compete only because we are low-cost producers.

Although declining terms of trade mean we aren’t any richer than my father was, we are still on the land – thanks to government and farmer investment in agricultural R&D.