Signs of regrowth, recovery in dairy industry
THERE are “green shoots” of a recovery in the dairy industry but fundamental change is needed if it is to succeed in a competitive global market, former Victorian premier John Brumby says.
A lack of trust between farmers and milk processors, a jumble of industry associations and high costs were key obstacles that needed to be addressed, he says.
Mr Brumby has been tasked by leading industry groups to map out a blueprint for the direction of the embattled sector.
His appointment to lead the Australian Dairy Plan comes after the industry was plunged into crisis by the implosion of Murray Goulburn Cooperative and drought.
More than 20 workshops have been held around the nation to get feedback from farmers and other industry participants.
“There have been a lot of farmers in real hardship, but at the same time we are detecting some green shoots,” Mr Brumby said. “With the current season’s (milk) prices there is a bit of confidence returning.
“If we get the plan right there are opportunities for growth.”
The note of optimism came as supermarket chains Woolworths and Aldi lifted the price of their home-brand fresh milk.
The rises are the latest signs that milk is no longer a key battlefront in the supermarket price wars and grocery chains are increasingly willing to pass on higher industry costs to consumers rather than pressure suppliers to swallow them.
While the downfall of Murray Goulburn put the national spotlight on the dairy industry, the sector has been in decline for at least two decades.
The number of dairy farms has declined from 20,000 in 1980 to fewer than 6000 today, while the nation’s share in the global dairy trade has fallen from 16 per cent in the 1990s to 6 per cent.
Mr Brumby said a complex mix of issues had hurt the sector – from increased global competition, drought and soaring energy prices to ageing farmers leaving the sector and their younger counterparts finding better returns from other food items.