Industry Resources

ADPF provides processor members a raft of key tools and resources on issues that have been identified to have an impact on their business at any given time.

In addition, ADPF provides the latest information and guidance to members on what’s happening in government, regulation and policy as relevant to the five strategic priority areas.

Deloitte Report: Economic and Broader Contribution of the Australian Dairy Processing Industry

Australian Dairy Products Federation (ADPF) has launched a new report by Deloitte Access Economics on the Economic and Broader Contribution of the Australian Dairy Processing Industry, that highlights the significant contribution dairy processors make to the Australian economy and regional communities.

ADPF commissioned Deloitte Access Economics to provide the first, singularly focused comprehensive positioning of the dairy processing industry and its economic contribution and value more broadly across Australia – including employment, environment and sustainability, exports, transport and regional development.

Highlights from the report include:

  • $15.7 billion generated in revenues p.a.
  • 70,158 FTE jobs supported across direct and aligned industries – 56% of them located regionally.
  • $6.1 billion of capital employed and $383 million capital reinvested p.a.
  • $12 million p.a. invested in R&D
  • Reduction in energy use and emissions intensity by 24.5% and 23.5% respectively, in the last three years.

The following resources provide complete coverage of the economic report and include the full report, a summary in the form of an infographic, a link to a podcast discussion and case-studies.

Listen to the Podcast with renowned rural journalist Sue Neales in conversation with ADPF President Grant Crothers, Brownes Dairy CEO Natalie Sarich-Dayton and Fonterra Australia Managing Director René Dedoncker as they discuss the report and provide some insights into what two processors are doing on the sustainability front and to meet consumer demand.

Full Report - Economic Contribution of the Australian Dairy Processing Industry

Infographic - Economic Contribution of the Australian Dairy Processing Industry

Media Release - Economic Contribution of the Australian Dairy Processing Industry

Fonterra Case Study

Read about Fonterra Australia’s work in developing sustainable packaging

Brownes Dairy Case Study

Read about Western Australia’s Brownes Dairy as they bring back the ‘Milko’ home delivery service

Burra Foods Case Study

Read about how Burra Foods are investing in their people and their local dairy communities

Lactalis Australia Case Study

Read about how Lactalis Australia, in partnership with Booth Transport, have been able to drive strong sustainability gains and environmental outcomes

COVID-19 continues to pose a significant threat to the Australian dairy industry. If the industry fails to adopt new and evolving safety regimes and different ways of working, then valuable export dollars, Australian livelihoods and public health would be at risk.

In response to the changing nature of the COVID-19 pandemic, regular review of the restrictions and vaccination requirements are completed by the Australian Government.

ADPF and Dairy Australia continue to maintain industry guidance for dairy processors, reinforcing the importance of having up to date COVID Safe protocols. The guidance is based on information provided by public health, other agencies and manufacturing companies that have had experience with COVID and includes a summary checklist with step-by-step instructions for dairy processors to minimise the risk and spread of COVID-19.

The checklist is divided into ‘Preparing for COVID’ and ‘Responding to and re-opening from a COVID incident’.

For more information on COVID-19 guidance for manufacturers, visit here.

The Australian Dairy Plan aims to drive a significant turnaround in the industry’s outlook through a range of bold initiatives targeting increased profitability, confidence, and unity over the next five years and beyond.

A joint initiative of Australian Dairy Farmers, ADPF, Dairy Australia and the Gardiner Dairy Foundation, the Plan aims to drive increased profitability, confidence, and unity within the dairy sector over the next five years – with key initiatives to increase Australia’s annual milk production by almost one billion litres, add $500 million of farmgate value for farmers, as well as help create thousands of new jobs. The Plan was informed by nationwide consultation with over 1,500 participants.

First published in October 2020, the First Annual Update Summary Report of the Australian Dairy Plan was released in September 2021 showing progress against the overarching goals:

  • Profitability – showed positive early signs of improvement for farmers in the first year, with an increase in the percentage of farmers who achieved the profit target.
  • Confidence – the percentage of farmers who are confident about the future of the industry has increased. While the percentage of processors who are confident is still at the target of 75%, this represents a decrease from 90% in May 2020.
  • Unity – remains a work in progress as industry works toward meeting the 2025 target. Additional data in 2022, especially from farmers, will provide a clearer, fuller picture of progress.

The Australian Dairy Plan promises to deliver on five key commitments:

  • We will reform industry structures to create a more cohesive dairy industry and strengthen our influence with key stakeholders.
  • We will attract and support new people and investment to build our industry.
  • We will increase our effort in marketing and promotion to build greater levels of trust and improve the value of dairy.
  • We will intensify the focus on farm business skills to improve profitability and better manage risk.
  • We will restore trust and transparency between farmers and processors to strengthen industry confidence.

The Milk Value Portal was a key initiative to deliver on Commitment 5 of the Australian Dairy Plan, in restoring trust and transparency between farmers and processors to strengthen industry confidence.

The ADP First Annual Update Summary Report included the Milk Value Portal which showed that 65% of respondents have found it easier to understand farmgate milk price since the website launched.

Click here for more information on the ADP First Annual Update Summary Report.

The next ADP progress report is due mid-2022.

  1. Gathered through the Milk Value Portal Survey November 2021, receiving data from a small sample size of users

The Dairy Code of Conduct (Dairy Code) came into effect on 1 January 2020 and 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. It requires processors that intend to purchase milk during the next financial year to publicly publish standard forms of milk supply agreements (MSAs) on their website before 2pm on 1 June each year, including minimum milk pricing.

The Government conducted its first scheduled review of the code in 2021, with the review’s report publicly released in February 2022. The Government response to the review report was then released in March 2022.

The Review Report found that the Dairy Code of Conduct provides a valuable framework for the dairy industry but there are still areas for improvement. To better the function of the Dairy Code, three recommendations have been put forward:

Recommendation 1

The Code should be amended to:

  1. clarify the definition of ‘minimum price’ under the Code, to explain that deductions related to milk quality will not contravene the ‘minimum price’ requirements
  2. allow, where agreed by both parties to a Milk Supply Agreement (MSA), an exemption from the minimum price requirements for a specified quantity of milk to enable participation in alternative milk pricing markets
  3. confer the roles of mediation and arbitration adviser under the Code to the Australian Small Business and Family Enterprise Ombudsman.

To note: due to the election and the Government in caretaker mode, timings for changes to the Code were delayed.

Recommendation 2

To support the operation of the Code, the Australian Government should:

  1. develop additional guidance material to assist compliance with the Code
  2. work with industry stakeholders to continue to make improvements to price transparency.

The development of additional ACCC guidance materials is now complete – refer to the supporting notes below.

Recommendation 3

The Australian Government and industry stakeholders should investigate and gather further evidence to determine suitable solutions to address the following areas for potential improvements to the Code:

  1. extensions of 3-year contracts
  2. small business definition and exemptions
  3. MSA variation requirements
  4. non-exclusive contract arrangements
  5. minimum price in multi-year contracts
  6. multi-party dispute resolution and arbitration.

Work in this area is expected to commence in the second half of 2022, ahead of the the Australian Government’s second review of the Code which can be announced on or after 1 January 2023.

Click here for the Australian Government’s response to the first review of the Dairy Industry Code.

Dairy Code of Conduct – updated Guidance notes and a new processor checklist now available

The ACCC updated its guidance materials on the Dairy Code of Conduct in May 2022.

The updated guidance provides greater detail on the interpretation of the Code’s ‘single document’ requirement, arrangements for cooperatives and collective bargaining groups, what constitutes a ‘material breach’, loyalty payments and other bonuses, and the requirements to publish dispute reports.

Key updates and changes enclosed in the checklist include:

  • Transitional periods: references have been removed to the Code’s transitional period.
  • Single document requirement: additional detail has been provided around non-written Milk Supply Agreements (MSAs), and how milk supply handbooks should be incorporated into MSAs as well as guidance around the use of pricing letters and directed processors to consider any implications arising out of the minimum price, step-down, and good faith requirements under the Code.
  • Collective bargaining groups: collective bargaining groups do not receive any special concessions under the Code. General guidance has been provided on factors collective bargaining groups should consider under broader competition laws, and a link to the ACCC’s small business collective bargaining class exemption.
  • Cooperatives: cooperatives receive a limited exemption from the supply period requirements and are permitted to enter into open-ended agreements with their members. The ACCC’s interpretation of what constitutes a cooperative has been further signposts.
  • Material breach: additional guidance sets out further detail around ‘material breach’, including the view that a ‘material breach’ refers to an important or significant breach. However, only courts can determine whether a particular breach of an agreement is in fact a material breach. General examples of conduct that may constitute a material breach, such as regular or habitual breaches or many unremedied breaches by the farmer, have been outlined.
  • Loyalty payments: guidance provides some additional detail on loyalty payments, including that they can only be subject to certain conditions, that farmers are entitled to pro rata payments if an agreement is terminated early, and reminds processors to be mindful of their other Code and Australian Consumer Law obligations in relation to other supplementary payments to farmers.
  • Publication of dispute reports: guidance clarifies that all processors must publish a report on disputes, even if nil disputes have been reported in the relevant period.

To summarise the core obligations under the Code, the ACCC has also released a new processor checklist to support the development of a MSA. It covers dealing in good faith, publication requirements, key requirements for executed MSA, variations, terminations, as well as complaints, disputes, and record-keeping.

It is important to note that this checklist is not a complete summary of obligations, and processors should seek specialist advice on how the Code applies to their circumstances.

Access the ACCC’s ‘Processor checklist for the Dairy Code’ here.

Developed with the support of dairy processors – both ADPF members and non-members, the Milk Value Portal (MVP) takes average farmgate milk pricing (FMP) data and puts it in an easy-to-use format that farmers can easily interpret.

The MVP provides answers to the question ‘what is the milk price’ and ‘what drives the milk price in Australia?’ It includes relevant global and domestic intelligence and insights into the dairy market and supply chain influences on price.

At the core of the MVP, is the Farmgate Milk Value Tool that enables an interactive experience on FMP value, based on current and verified processor data.

Farmers can enter their farm parameters such as geography, farm size, and milk components (fat and protein content), to see what the average milk market is paying (in cents/litre or $/kg of milk solids) for a particular time of the year.

Farmers can then use this data to adapt their farms to achieve the best value and know what to expect when contracts are up for renewal.

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

The Milk Value Portal is a fully-integrated one-stop shop for milk price modelling that is available free for use. It can be accessed through a web browser on a desktop or tablet, and is also mobile-friendly.

It’s an incredibly simple and easy to use tool that provides an intuitive user experience. You don’t have to be an economist to get the most out of the tool.

Click here to visit the Milk Value Portal.

Milk Value Portal Flip Book

Introducing the Milk Value Portal (MVP) - an industry-first one-stop shop that helps farmers understand the value of their raw milk. MVP is ADPF's commitment to rebuilding trusted partnerships between farmers and processors, as outlined in Commitment 5 of the Australian Dairy Plan. This Flip Book outlines the challenge, how MVP helps solve it and an overview of how to use to the tool.

ADPF has developed a 3-year strategy to guide all activity through until 2022. The strategy seeks to help ADPF best represent its members and ensure processors are playing their part to help deliver on the wider industry’s vision to provide nutritious dairy food for a healthier world.

ADPF’s vision is to protect and promote dairy for the future success of dairy processors, marketers and farmers. Our core purpose is to be the trusted source of advice and leader of public policy to government and the community, on the economic and social benefits of dairy.

The ADPF 3-year strategy is guided by five strategic priorities and corresponding objectives:

  1. Optimising trade and market access – Increase export competitiveness and international market access
  2. Sustainable access to resources – Create balanced and fair access to resources to improve our competitive advantage
  3. Effective regulation and policy – Influence government policies for the benefit of dairy
  4. Economic contribution and livelihoods – Promote the economic contribution of dairy processing and marketing
  5. Strategic leadership and communication – Be the trusted, ‘pre-competitive’ voice for dairy processors and marketers

ADPF 3-year strategy on a page

Find enclosed the ADPF 3-year strategy on a page. This document guides our activity through FY22. It outlines key priorities, initiatives, enablers and partnerships for the next three years under each of our five strategic platforms.

Australian dairy exports have continued to be largely unaffected by any regulatory barriers from the Chinese Government as a result of trade tensions between Australian and China. However, we are aware that a number of Chinese customers have been asking Australian dairy exporters for additional COVID assurances on their product safety, including a requirement for nucleic testing results.

Standard Dairy Quality Assurance Statement

In partnership with Dairy Australia, and in consultation with the Department of Agriculture, Water and Environment; we have updated the Dairy Quality Assurance statement, to enable a standardised response as needed.

Following the Australian Competition and Consumer Commission (ACCC) inquiry into perishable agricultural goods (PAG) last year, one of the recommendations was for governments and industries to explore measures to increase price transparency in PAG industries, in order to increase competition in those industries.

The program includes:

  • The delivery of workshops with perishable agricultural goods industries to understand their market transparency requirements.
  • A grants program to develop and implement tailored mechanisms to improve price and
    market transparency.

Co-design Workshops

Each sector in the perishable agricultural goods supply chain will be offered the opportunity to participate in two full day workshops. Industries can either have their own industry-specific workshops, or may hold sector-wide workshops where appropriate. Attendees will include representatives across the supply chain for the relevant sector, RDC(s), DAWE and the ACCC.

Workshops will provide an opportunity to discuss price and market transparency issues in the sector, brainstorm ideas to improve transparency and co-design the details of the project.

The workshops will be held between July and December 2021.

Grants for market transparency tools

Following participation in co-design workshops, RDCs will be invited to apply for funding for projects that generate knowledge, technologies, products or processes that improve market transparency appropriate for the relevant supply chain.

Project bids will need to be co-sponsored by partners from across the relevant supply chains and include non-matching (monetary and in-kind) co-contributions from industry participants. Bids will need to clearly demonstrate how the project will improve market transparency, how the project will be implemented, and an impact analysis across the entire supply chain, and how the proposed market transparency tool will be accessed.

Read the Department of Agriculture, Water and the Environment’s factsheet with more information.

Factsheet: Improving price transparency in Fresh Food Supply Chains

The Path to Half
The Path to Half explains the true cost of food waste in Victoria and provides the first Australian perspective on the impacts of food waste and food production on climate change, water loss and economic costs.

CEBIC Round 3 Thought Leadership event
Designing our future using the ‘waste’ of the past. A thought-provoking and imaginative opening event to our series on reducing food waste.

Launching our Circular Economy Business Innovation Centre
Sustainability entrepreneurs from Victoria, Australia and Chile shared how they built successful businesses that embrace circular economy and transformed market gaps into profitable opportunities.

National Food Waste Strategy
The National Food Waste Strategy provides a framework to support collective action towards halving Australia’s food waste by 2030. The strategy identifies four priority areas where improvements can be made—policy support, business improvements, market development, and behaviour change.

Dairy businesses – both farms and processing – are the backbone of the economy and the community in many regions of the Murray Darling Basin.

Dairy production and processing in the Basin underpins Australia’s food security, producing 22% of Australia’s milk, a key source of nutrition in the Australian diet.

The region is ideally located for both export and domestic markets, with efficient connectivity through road, port and telecommunications infrastructure.

The following resources provide key data and insights into dairy’s presence in the Murray Darling Basin, and can be drawn on for stakeholder meetings, briefings and submissions.

Dairy in the Murray Darling Basin Fact Sheet

This document provides a snapshot of the value, challenges, resilience and optimism of the dairy industry in the Murray Darling Basin. This document will be updated annually with new data and research. This version was created in May 2021.

Dairy in the Murray Darling Basin Infographic

This document provides a snapshot of key data on dairy in the Murray Darling Basin. This document will be updated annually with new data. This version was created in May 2021.

“Don’t mince words: definitions of meat and other animal products” report

Health Star Rating– Industry Fact Sheet

The May 2022 Australian Dairy Products Federation (ADPF) Member Forum focussed on the ‘changing profile of the Australian Dairy Farm – who will dairy processors be doing business with in 2030 and beyond’?

Speakers for the event included Richard Eckard, University of Melbourne and Director of the Primary Industries Climate Challenges Centre; John Droppert, Dairy Australia, Geoff Davis, Merricks Capital and Peter Steele, NAB Agribusiness.

The Forum also featured an informative panel discussion with three dairy farm owners and operators across Australia: Alan Davenport (Tas), Daniel Cochrane (NSW) and Kirsti Keightley from Prime Value Asset Management, discussing their business models and how their farms will operate in the future, the likelihood of corporate investment, and the opportunities and challenges of sustainable dairy production.

The Forum was attended by ADPF members, industry representatives, and government bodies.

Select key insights include:

  • The effects of climate change are compromising growing seasons, with decreased rainfall in Gippsland, West Victoria, South Australia, and Western Australia. With this in mind, the dairy industry will need to consider a shift away from growing perennial ryegrass as a base. It is important that the dairy industry invests in a more resilient pasture base moving forward and prepares itself for more pressures from other land users such as cotton.
  • A major challenge is a carbon neutral dairy industry, however there is the potential to be halfway towards carbon neutrality by 2030 with technologies available.
  • Consolidation of sub-scale dairy farms continues to be a key macro driver for industry, where ‘1,000 cows is the new 300.’
  • There is an opportunity to capitalise on Australia’s high-quality milk and industry reputation, noting the resource constraints currently in Europe and NZ.
  • Recoupling of land ownership from business operations (sale & leaseback) has increased, with a very high return on equity for top-performing operators.
  • ESG is critical when it comes to capital sourcing for the dairy industry, with investment firms wanting to finance the manufacturing of the circular economy, e.g., waste-water treatment, solar panels and bio-waste use.
  • Family farms still dominate the dairy industry. As these operations grow, they are implementing more corporate structures, with shared farming or leasing arrangements in some cases.
  • Today’s farm-gate milk price has significantly improved interest servicing capacity.
  • Addressing labour and wage challenges and securing longer-term contracts will encourage investment back into dairy businesses.

ADPF extends its thanks to all those who tuned in to the webinar and in particular to all the speakers for their time and insights.

 

ADPF May Member Forum

Facing increasing pressures right across the supply chain to take responsibility to better manage climate change, animal health and welfare and human rights (including modern slavery), the ADPF is participating in the review of the ADIC Dairy Sustainability Framework to ensure industry best-practice and the current goals, commitments and targets set the industry up for success.

The Australian Dairy Sustainability Framework was launched in 2012 and aims to deliver the dairy industry’s promise to provide nutritious food for a healthier world by taking a whole of industry approach.

The Dairy Sustainability Steering Committee meeting and Dairy Sustainability Consultative Forum provided an opportunity to learn more about the changing environmental and sustainability landscape.

Graeme Nicoll is the new Chair of the Sustainability Steering Committee and Jack Holden, Fonterra the Deputy Chair.

Click here for more information on the Dairy Sustainability Framework.

To celebrate 10-years of the Sustainability Report ADPF developed a small social media campaign, sharing the Report on LinkedIn with key insights from the report. In addition, ADPF shared key figures from the Report on Twitter.

Australian Dairy Sustainability Framework 10-year Anniversary Report