One of Australia's most successful businesses is the dairy industry, which exports $2.1 billion worth of dairy products and produces milk with a gross value of $2.7 billion. Australia's dairy sector has comprised of 5,000 dairy farmers who generate $8.75 billion liters of milk every year.
Due to relatively high farmgate milk prices and cheap input costs, farmers have concentrated on calving. According to Dairy Australia's current production forecast, production will increase by 0.5% to 2% this year, resulting in and 8.8 to 9 billion liters national milk pool.
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Problems in the Australian Dairy Industry
Climate change and Limited Natural Resources
Due to climate change, many Australian farms have had to evaluate their strategies and operating systems to see whether their farms are ecologically friendly or not and it applies similarly to the dairy business. As a result of the continuous drought and limited water resources, every component of food production has an environmental cost.
For the dairy business, professional guidance was to boost efficiency while simultaneously ensuring long-term survival. The management of wastewater in the future will be a significant challenge (effluent is the waste from the milking shed and yards). Also, a growing number of farmers are using this nutrient-dense manure as a fertilizer rather than dumping it into the environment.
COVID -19 Pandemic
The Situation and Outlook report related to the COVID-19 pandemic demonstrate that Australia's dairy sector has avoided severe setbacks, and farm conditions still remain favorable for the profitable business model.
Present Situation
Fresh Milk Market Demand
According to the USDA, fresh milk and UHT treated (shelf life increased) milk sales have peaked in the previous year as customers return to their long-term purchasing patterns. On the other hand, sales of plant-based beverages have increased as consumers become more familiar with these products. Currently, Australians have abandoned dairy products; most households continue to purchase milk regularly, notwithstanding the current economic climate.
Input Demand
Supplemental feed requirements remain modest, and the price of fodder has remained consistent, but the cost of grain and fertilizer has increased. But water sources are still in higher demand category. If the predicted rain increases the water availability, pasture growth in spring and water sources may spring again.
But there is a high possibility to pests attacks like mice and other diseases, and also lack of workers would affect crops, yield predictions for the upcoming harvest are upbeat.
Government Support
The government has taken several steps to withstand these natural and economic problems. When considering the establishment of an effective and sustainable dairy business, Researchers are looking into ways to reduce emissions. They are particularly interested in the ecological consequences of the Australian dairy cow, which is subject to investigation.
The collaboration with Dairy Australia and the Gardiner Foundation is beneficial to scientists who work with cattle and forage species to better their genetics and to scientists who study other species.
$55 million worth of five-year research collaboration between business and government was launched by the Minister of Agriculture. The project will examine various issues confronting dairy farmers, including how to develop more productive cows that emit less CO2.
As a new step, the government provides farmers with the knowledge and skills to breed and feed cows that provide more milk while producing healthier calves and emitting less methane as the climate changes.
According to projections, dairy farmers will need to increase production by 1.5 per cent each year to maintain profitability due to climate change and other regulatory and trade changes.
Also, the government and private sector get together to schedule their upcoming five years of the dairy industry. This Australian Dairy Plan was launched as the most extensive project in the Dairy industry's history in Australia.
Australian Dairy Plan 2020-2025
The Australian Dairy Plan 2020-2025 is a forced plan of the Australian Dairy Products Federation, Dairy Australia, and Gardiner Dairy Foundation. The project's primary focus is to connect these government control bodies and all dairy farmers and their communities together.
Considering dairy production in Australia, it is the fourth-largest rural industry in terms of farmgate value, which makes $4.6 billion in revenue and employs over 43,500 people all over the country. The dairy sector is responsible for $9.6 billion in economic contribution and $3.4 billion in export revenue.
A strong dairy sector is critical to the economic well-being of many Australian cities and communities. The government has tested the dairy industry's distribution system during the last decade. This testing has resulted in an industry-wide recognition that collaboration is necessary to secure the dairy sector's future success.
The main targets of the plan are lifting profits across the whole dairy supply chain, Confidence rebuilding among the Agri business related to Australian dairy product buyers, and the reunion of all the industries associated with dairy products to achieve future targets together.
As a summery of the Australian Dairy Plan, this Dairy plan has considered 5-year time period with five significant commitments for a better future with dairy production.
Reforming industry structures
Reformation of the dairy industry to produce a more homogenous dairy business is the main target and it would increase influences among stakeholders. Their dairy sector will be more connected due to the reform, as priority-setting and strategic decision-making will be transparent and open to all.
Assisting the industrial revitalization and recruit and support
Attracting new people and communities for money and knowledge investments is the basic idea of this commitment. They are targeting the support for technology, scientific technique from outsources. As a result, they must devise strategies to attract new individuals, provide them with opportunities, and get funding. The industries will enhance as an outcome of strategic decisions.
Increase marketing and promotion efforts to increase trust and increase the value of dairy.
With increased consumer interest in food preparations steps and methods, the industry has to communicate more effectively with the consumer. Australian dairy has such a compelling narrative to tell in terms of health credentials, origins, and quality. There is a potential for all supply chain segments to collaborate more closely to improve their marketing and highlight the value of consuming dairy and the sustainable way it generates.
Improve profitability and risk management by focusing more on agricultural business skills.
Boost the industry confidence, reestablishment of transparency and trust among agriculture and manufacturers.
These are the five main commitments and these are genuinely cover the whole dairy industry's remaining and past problems, and they have a good strategic plan to overcome that with a better plan.
According to studies, climate change and other regulatory and trade developments will force dairy producers to boost production by 1.5 % per year. However, Australian government can achieve that target with their strategic plans for the near future.
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