Effective policy & regulation

The Australian dairy industry can be complex, with many moving parts. Effective policy and regulation are required to create an environment where our industry can thrive.

ADPF advocates for a better deal for dairy using one unified, considered voice to represent whole of industry. ADPF is the critical link between farmers and consumers.

The Australian dairy industry works best when all players are working harmoniously together.

ADPF will call out counter-productive policies that don’t benefit the entire Australian dairy supply chain. This means taking on big arguments and taking a stance on regulation that matters to members.

The Dairy Code of Conduct (Dairy Code) is an instrument under the Competition and Consumer Act 2010 and came into effect on 1 January 2020. The Dairy Code aims to improve the transparency of trading arrangements between dairy farmers and those buying milk.

The Dairy Code sets out mandatory elements in supply contracts and requires processors that intend to purchase milk during the next financial year to publicly publish standard forms of milk supply agreements on their website before 2pm on 1 June each year, including minimum milk pricing.

Our focus:

ADPF hopes that the Dairy Code will see greater cooperation between farmers and processors – key to the long-term success of our industry.

We have supported the introduction of the Dairy Code through member education and resources, such as the development of the ADPF Sample Template of Dairy Code Compliant Milk Supply Agreement Terms that can assist dairy processors and farmers with the negotiation of a Milk Supply Agreement.

ADPF has now taken this a step further by creating the Milk Value Portal, which provides publicly available milk pricing data and puts it into an easy-to-interpret format for farmers and analysts. This enables a better understanding of how farmgate milk pricing works and the factors affecting milk prices offered to farmers across Australia.

For more information on the Dairy Code, visit the ACCC’s website.

Since deregulation, there has never been a comprehensive, central point of information for farmers to get an understanding of how farmgate milk pricing (FMP) works.

FMP is seen by many as complex, risking making on farm revenue business decisions more difficult than many would like.

While the ADPF it is not in a position to simplify it, it is able to use primary data exclusively from dairy processors, to better help explain the complex question ‘what is the FMP?’ and ‘what drives the FMP?’

In an industry-first, the ADPF with the support of dairy processors – both ADPF members and non-members – have created the Milk Value Portal, designed to provide farmers and analysts data and insights to better understand the milk market and make more-informed business decisions to get the most value out of their raw milk.

At the core of the Milk Value Portal is the Farmgate Milk Value Tool, which takes aggregated FMP data and puts it into an easy-to-use format that farmers can easily interpret.

The tool allows a farmers to enter their farm parameters such as geography, farm size, and milk fat and protein content to see what is the average value of their milk, at a particular time of year – in cents/ litre and $/ Kg of milk solids.

The data is regularly updated to ensure the Portal remains relevant.

The Portal will also feature relevant intelligence and insights of the dairy products market (local and global) and supply chain influences on FMP.

Milk Value Portal is ADPF’s commitment – as the peak body for dairy processors – to industry trust and transparency and rebuilding trusted partnerships between farmers and processors, as well as Commitment 5 of the Australian Dairy Plan.

The Milk Value Portal is available through a simple, mobile-friendly website. For more information, visit www.milkvalue.com.au

The Health Star Rating system is a front of pack labelling system that uses a star-rating to highlight the nutritional profile of packaged foods in Australia – with a rating of 0.5 to 5 stars, with 5 stars being the best.

Since its implementation in June 2014, the dairy industry has advocated for a fair labelling system that appropriately represents the nutritional credentials of dairy foods – milk, yoghurt and cheese. Unfortunately, many yoghurt and cheeses scored less than 3 stars – despite a founding principle that all Five Food Group (or ‘core’ foods – which includes dairy) score a minimum of 3 stars.

In November 2020, the Health Star Rating calculation system was revised, and while improvements were achieved for yoghurts, more than half of all Five Food Group (or ‘core’) cheeses continue to score less than three out of five stars.

Our focus:

Cheese is an integral part of the dairy food group, which alongside grains, vegetables and legumes, lean meats and fruits, is considered a Five Food Group, as per the Australian Dietary Guidelines (ADG). The ADG state that Five Food Groups are those that should be consumed regularly as part of a balanced diet.

Despite this, in July the Australian and New Zealand Ministerial Forum on Food Regulation endorsed a revised Health Star Rating system that fails to take into the account the nutritional benefits of cheese, and unfairly puts it in on par with certain junk food purely due to its inherent sodium and fat content.

ADPF supports the principles of the Health Star Ratings as an important tool to help Australians make informed, healthy food decisions. However, we continue to advocate for the nutritional benefits of Five Food Group cheeses to be better acknowledged, as dairy plays an important role in a balanced diet.

Ninety per cent of Australians do not consume the recommended daily intake of dairy, and the current Health Star Rating system threatens to increase that number. That is why ADPF is working alongside Dairy Australia in seeking to continue to engage government to achieve an improved outcome for cheeses under the Health Star Rating system.

The 2013 Australian Dietary Guidelines (ADG) provide guidance about the amount and types of food that Australians should eat for overall health and wellbeing, based around the five food groups – which include dairy and alternatives. The recommendations are based on scientific evidence, developed by assessing good quality research.

In July, the Federal Minister for Health, Greg Hunt, announced a $2.5 million funding commitment to review the ADG (published in 2013).

The ADG are a primary resource used across all sectors of the industry to inform key health policies, education and communication.

Our focus:

ADPF will work closely with Dairy Australia, other dairy industry partners and ADPF members, to ensure that dairy is fairly reviewed, and that decision makers are well-informed about the nutritional benefits of dairy, backed by the latest scientific evidence.

We will work collaboratively to collate and assess the dairy research to inform this process; considering health, agricultural, environmental and consumer research in this mix.

We will also glean the wisdom of our international counterparts, to develop an updated ADG Report that is best in class, accurate with its interpretation, and practical for the end-user.

Dairy has been one of Australia’s most inquired-into industries, with more than 10 reviews in the last 10 years. Many of these inquiries have failed to find substantial flaws within the industry, however different government bodies have expressed concern regarding communication lines and transparency within the industry.

These concerns are being addressed within the industry through the creation of the Dairy Code of Conduct, the Australian Dairy Plan and Organisational Reform. ADPF is also addressing this specifically through the development of the Milk Value Portal initiative.

ADPF makes submissions on behalf of its members to all inquiries into the dairy industry as they arise.

The latest inquiry is the ACCC Inquiry into bargaining power in supply chains for perishable agricultural products in Australia. The inquiry seeks to understand how the relative bargaining power of farmers, processors and retailers involved in supply chains for perishable agricultural goods affects trading practices which can, in turn, affect the efficient operation of these markets. The final report was handed down by the ACCC in December 2020.

Our focus:

Dairy processors are committed to creating a thriving and trusted industry, delivering jobs, economic growth and helping people to live well – ultimately built on the value of dairy being recognised throughout the Australian community.

The interdependencies between farmers, processors and retailers are critical to ensure all elements of the industry operate efficiently.

Dairy, like other Australian food industries, cannot carry undue regulatory costs or the negative impacts of ill-conceived regulation on business costs such as loss of market opportunities and/or deterrence of innovation and investment.

The market imbalance between dairy processors and retailers must change to support a viable and competitive industry that invests in people and innovation and can compete with imports.

The Queensland Dairyfarmers’ Organisation (QDO) is seeking authorisation from the ACCC for a licensing scheme for processors of milk and dairy products to apply a “Fair Go Dairy” logo to their products (the Scheme).

The Fair Go Dairy logo is intended to signal to consumers that the products bearing the mark are made from milk for which farmers have been paid a sustainable and ‘fair’ farmgate price (SFFP), with SFFP determined by QDO and based on cost of production (based on Queensland Dairy Accounting Scheme Reports), multiplied by the CPI Adjustment Rate.

Our focus:

The ADPF does not support the proposed QDO application on the Scheme – inclusive of the revised methods for calculating the SFFP – and recommends that the ACCC does not grant any form of authorisation. The risk and industry detriment from introducing the Scheme outweighs any consumer or dairy industry benefit.

In September 2020, Minister Littleproud convened a round table to understand industry’s views on the labelling and marketing of plant-based alternatives (PBA) and whether consumers may be being misled by current communication.

It was agreed that a PBA working group be established to conduct an evidence-based investigation on labelling and marketing of plant-based alternatives versus meat and dairy, and to consider whether existing arrangements can be improved – taking lessons from the Food Forum Ministerial review that concluded in July 2020.

The findings of the PBA working group will be used to develop an understanding of options to present to the Minister in March, along with recommendations for stakeholder engagement.

Our focus:

Both ADF and ADPF are part of the working group, supported by the technical expertise of Dairy Australia and a dairy processors sub-committee. We are working to provide a sound evidence base on which to base the recommendations on.

Milk Value Portal

A one-stop shop designed to provide farmers and analysts data and insights to better understand the milk market and get the most value out of their raw milk

Visit the Portal