DAIRY NEWS AUSTRALIA OCTOBER 2014
10 // NEWS – QDO CONFERENCE
Supply gap too much to bridge STEPHEN COOKE
QUEENSLAND’S EXISTING farmers
would need to double production just to meet rising demand for dairy caused by population growth in the State. These figures were revealed by the Queensland Dairyfarmers Organisation’s executive officer Adrian Peake at the farm body’s Toowoomba conference held last month. Mr Peake said increased production would only be achieved through on-farm investment. However, a survey recently conducted by the QDO and unveiled at the conference revealed only 24% of respondents believed they would still be dairying in five years’ time. There are now 471 dairy farmers in Queensland and 43% of them responded to the survey. The survey found that only 4% said they were very confident in the future of the industry, 22% said they were confident, 37% were uncertain, and 37% were not confident. Those farmers who
indicated they were leaving nominated ‘lack of profit’ as the biggest reason, at 84%, which is 16% higher than the previous survey in January 2014. Sixty seven percent of respondents said their milk cheques were less than their monthly accounts. To stay dairying, 39% want more than 60 cents/ litre while 43% more than 65 c/litre. Farmers also said they would like more flexibility with the rest of the supply chain, particularly when it comes to having the opportunity to supply milk to more than one processor, which they cannot do now. Some 61% of respondents said they would support a ‘dual-supply’ option, while 74% also expressed an interest in a Queensland-wide milk supply cooperative. Mr Peake said Queensland has lost 120 farmers since Coles launched its $1/ litre milk in January, 2011 – the equivalent of $360m of investment in the indus-
iDAIRY®
try. He said processors have had to discount their branded milk in a bid to recapture market share, further eroding returns to farmers. Dairy consultant Chris Phillips, formerly with Dairy Australia, told the audience discounted milk will feature in Australia for years to come. “Coles told investors at recent meetings they are committed to discount strategies, or price leadership,” Mr Phillips said. He also told farmers prices would not meet their expectations. “Most world market returns yield below the current northern dairy industry milk price,” he said. Norco deputy chair, Tony Wilson, told the audience the co-op’s sales
of branded milk were growing each month. Norco is using the concept of provenance to market its milk. “It’s growing but it’s tough work while $1 milk remains,” Mr Wilson said. When asked by a member of the audience why Norco signed with Coles to provide milk for the Coles private label, Mr Wilson was pragmatic. “Retailers are here to stay, and if you want to bottle milk, you need to work with them,” he said. “The Norco contract to supply Coles is a good one.” Norco hopes to build its fresh milk exports to China to 20 million litres a year but Mr Wilson said its branded ice cream exports had the potential to be bigger than its fresh milk exports.
Dan Dickeson, Lion, with Ged Mullins and Rachael Parkes, Leyburn.
Bill Gulbransen, Mt Mee, Jason Rozynski, Gympie, Tony Gault, Harlin.
Former QDO executive officer Adrian Peake; QDO president Brian Tessmann; vice-president Ross McInnes.
Gary Rozynski, Gympie, Craig Findsen, Parmalat, Christine Clewley, Kulpi, Andrew Taylor, Parmalat.
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