1. Overview of the Australian Dairy Industry Presented by: Janine Teese, Executive Officer, Subtropical Dairy, June 2008 Subtropical Dairy is a Dairy Australia regional development program

2. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Presentation snapshot Where are the farms located? The market and product mix What do the farms look like? Who are the support organisations? Why is this being called the brave new era? Opportunities and Challenges

3. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Australian dairy production areas

4. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Rainfall Distribution

5. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Location Strong correlation between rainfall and dairy industry location. Why? -Located close to reliable feed and water sources. Need either irrigation or reliable rainfall. -Perishable product. Located near population centres.

6. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Domestic Product mix 06/07

7. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Product mix 06/07 by state

8. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 National Market Supermarkets account for majority of sales Consumption of flavoured milks continue to grow

9. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Market and Product Mix Northern Industry is predominantly fresh milk sales. Annual growth of 6%, Southern Industry export focused with whole milk powder (WMP), skim milk powder (SMP) and cheese.

10. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Market and Product Mix Industry is open to imports: 26% of cheese and 15% of butter consumed was imported New Zealand accounted for 80% of cheese imports and 90% of butter

11. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 International market prices EU & USA skim milk powder stocks

12. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 United States exports as % of world trade The world & their export %’s

13. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 herd size was 247 in 2008 up from 237 in 2007. 9% of dairy herds contain 500 or more cows, larger herds account for 25% of the national herd. The average farm has about 164 ha of dairy land. An average of 18% of dairy land is irrigated (37% of land is irrigated on farms that irrigate). What do Australian farms look like?

14. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 average grain use was 1.7 tonnes per cow per year, which was up from 1.4 in 2007. 42% of farms were high grain users (up from 29%), feeding more than 1.5 tonnes per cow per year. 74% of farmers buy grain as and when required; 21% use forward purchase arrangements for later delivery. What do Australian farms look like?

15. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Split calving (36% of farms), seasonal (once a year) calving occurs on 35% of farms. Year round calving is dominant in regions with a high supply requirement for fresh products, but accounts for 29% of farms nationally. Sharefarmers are involved in 18% of dairy farms. 24% of dairy farms are operated by the ownership couple. What do Australian farms look like?

16. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 What do Qld farms look like? Average 158 cows, producing 890,000 litres, or 64,080 kg of milk solids annually. Average dairy land area is 137 hectare. 35% of farms in the region are staffed by family only. 87% of the regions dairy farmers have been affected by drought or flood all round calving on 88% of farms, while split or batch calving is used on 4% of farms and 7% of farms use seasonal production.

17. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Dairy Industry Organisations Dairy Australia (DA) – levy funded with co- contribution by Australia government Dairy Australia Regional Development Programs Australia Dairy Farmers (ADF) – advocacy and lobbying: funded by membership State Farmer Organisations

18. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 ‘Brave new era’ Unchartered waters: -High grain prices -High price of substitutes -High milk prices -Shortage of protein worldwide -Resource constraints -Impact of carbon trading and more unknowns….

19. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Challenges Drought Variable climate Urbanisation of traditional dairying areas Changing regulatory environment Scarcity of resources: human, land, water, animals, grains

20. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 3 year rainfall data to Apr 2007

21. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 3 year rainfall data to May 2000

22. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Challenges for Northern Industry All of the above plus more: Cattle tick – Boophilus microplus Buffalo fly – Haematobia exigua Heat stress C4 grass  high fibre, low digestibility Short and unreliable ‘rainy’ season

23. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Subtropical Dairy Dairy Australia Regional Development Program Purpose Coordinate and manage the regional delivery of: -programs and projects, -research, -development, -extension and -education initiatives in the northern dairy industry

24. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Dairy Australia Regional Development Programs (8) Sub Tropical Dairy Board of Directors (6) Management Committee (11) NSW DPI, QDPI&F, processor reps & SD Board Management Committee (11) NSW DPI, QDPI&F, processor reps & SD Board Technical Advisory Group Executive Officer Janine Teese Regional Groups (7) Members include local farmers and service providers:  Central Qld  Far North Qld  Burnett  Darling Downs  South East Qld  North Coast NSW  Mid North Coast NSW Regional Groups (7) Members include local farmers and service providers:  Central Qld  Far North Qld  Burnett  Darling Downs  South East Qld  North Coast NSW  Mid North Coast NSW Organisational Structure

25. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Example of Subtropical Dairy activities Young and Future Farmer Networks Empowering Farmers project Herd Health Workshops

26. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Future Farmer Networks Between 20 to 50 farmers in each network Open to anyone ‘young at heart’ Priorities and activities set by farmers Regular events in each of the regions

27. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Future Farmer Networks Activities include: Workshops Farm Walks Discussion forums Monthly e-newsletters Social events: cricket, skirmish, ten pin bowling, BBQ’s

28. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Empowering Farmers Computer training Topics: Internet and Email Training, Quickbooks accounting, Microsoft Excel, General computer operation Three years trained: 275+ farmers across Subtropical Dairy area Currently doing 1 on 1 training Project ends June 2008.

29. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Herd Health Workshops Lameness and Hoof Care Milk Quality and Mastitis Herd Fertility Monitoring heifer growth rates

30. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 Summary Spread over huge geographic and climatic range Range of production systems to suit climate Cost price squeeze with high cost of inputs means new ways of doing things Industry is positioned strongly for the future

31. Subtropical Dairy - PO Box 491 Gatton QLD 4343 t: 07 5482 2281 The Future Pasture monitoring from space Automatic milking systems Individual animal monitoring GPS farming systems linked to crop harvests and agronomic activities