Questions and Answers

The Australian Dairy Plan is a bold industry led initiative to deliver increased profitability, confidence and unity across the dairy industry over the next five years and beyond. It has been developed by four partner organisations (Australian Dairy Farmers, Australian Dairy Products Federation, Dairy Australia and Gardiner Dairy Foundation) with its development led by Independent Chair, John Brumby AO. It is the first time key organisations representing the whole dairy supply chain have worked together to deliver a single set of national priorities for the industry.

The Australian Dairy Plan was conceived in response to one of the most challenging periods experienced by the industry. Milk price volatility and a succession of very dry seasons had impacted farm profitability across the country, causing a significant contraction in the number of dairy farmers and the size of the national milk pool. All parts of the supply chain recognised that collective action was needed to reset the industry's direction, through a strategic plan designed to rebuild its profitability, confidence and unity.

Experience from other countries and industries shows how a national plan that is widely adopted can drive major positive change – examples include the successful expansion of the Irish dairy industry, the turnaround of Australia’s cotton industry and the unification of the New Zealand dairy industry.

The plan was formed from one of the most extensive listening exercises in the history of the dairy industry. Its five key commitments and supporting initiatives were shaped by the views of over 1,500 farmers, processing workers and service providers who took part in a nationwide consultation process involving 25 workshops across the country and numerous meetings with other key industry stakeholders. This process culminated in a two day national workshop attended by 130 representatives from across the industry. A draft plan was produced in December 2019 and, after a further period of industry consultation and additional analysis of industry trends, the final plan was released on 28 September 2020.

The aim of the plan is to reset the industry’s direction after a number of challenging years. The plan aims to deliver increased profitability, confidence and unity across the dairy industry over five years and beyond. It is based 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 to 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.

Work on the Dairy Plan commenced in early 2019. Following an extensive nationwide consultation process between May–July 2019, a draft plan was published in December 2019. After a further period of industry consultation, the final plan was launched on 28 September 2020.

The four partners together with all sides of industry are committed to working together to implement and deliver the Dairy Plan’s goals and align their strategic focus.  

To ensure the highest levels of commitment and accountability, regular reporting occurs every six months. This progress and performance monitoring and reporting is to ensure the Dairy Plan does not ‘sit on the shelf’ and vital progress is made. 

The Plan has been developed by the industry, for the industry. There is no specific ask from government, however we believe there is a significant opportunity for the Federal Government to work with the industry to maximise dairy's contribution to its target of increasing agricultural production to $100 billion.

The plan highlights opportunities to drive down costs of energy which are a major cost for dairy farmers and manufacturers. We will work with governments at state and federal level to encourage the expansion of programs and new initiatives to produce lower cost and more sustainable energy for the whole dairy industry.

While this is a constant quest for farmers, Commitment 4 of the Dairy Plan brings a more intense focus to managing costs in a volatile operating environment so that margin can be maintained more consistently as markets and seasons fluctuate.

The plan highlights opportunities to drive down costs of energy which are a major cost for dairy farmers and manufacturers. We will work with governments at state and federal level to encourage the expansion of programs and new initiatives to produce lower cost and more sustainable energy for the whole dairy industry.

The core programs in research and development, policy, trade and market development, people development and sustainability also have a strong focus generating margin consistently as well by reducing key farm costs and such as feed costs higher returns.

The Dairy Plan recognises that the dairy industry includes the whole of the supply chain and success is not confined to any one part of it. Rebuilding trust between farmers and processors is a key objective of the Dairy Plan and vital to strengthening industry confidence and unity. The processing sector is committed to providing increased transparency around farm gate milk prices and the introduction of a new Milk Value Portal has been designed for that purpose.

The Dairy Plan sets the strategic direction and outlines the specific actions necessary to drive value and productive changes to achieve this objective over the next five years and beyond – engaging the whole of the supply chain.

It is fundamentally different to any of those that have preceded it, with a number of unique features that give it a greater chance of success:

• A sustained commitment to collective action: this is the first time in the industry's history that these four partner organisations have worked together to deliver a plan with a single set of national priorities.
• An industry-wide, national engagement: the key shared priorities for the industry have been confirmed through one of the largest listening exercises in our industry's history, reaching over 1,500 people.
• A focus on the drivers of business success: while previous plans have focused on growth targets, the Dairy Plan focuses on the drivers of business success – profitability, confidence, unity – recognising this is the path to long-term sustained growth by driving value and value creation across the supply chain.

Total industry investment in the development of the Australian Dairy Plan was $1.4 million, including nationwide consultation and workshops, production of reports, marketing, independent chair and secretariat. Costs have been jointly funded by Australian Dairy Farmers, Australian Dairy Products Federation, Dairy Australia and Gardiner Dairy Foundation and are commensurate with the formation of a national plan to drive the future success of the industry.

There is a phased approach to the implementation of the Dairy Plan and budgets will be agreed by the partner organisations for each phase. There will be some ongoing administration costs to support monitoring and reporting of the plan's implementation. 

The Dairy Plan has been jointly funded by Australian Dairy Farmers, Australian Dairy Products Federation, Dairy Australia and Gardiner Dairy Foundation.

John Brumby was engaged as Independent Chair to oversee development of the plan. He chaired regular meetings of the partner organisations and oversaw the development of the plan and key documents and meetings with key stakeholder groups. An important part of his contribution was to help the partner organisations find consensus and build a clear set of priorities and actions. As an external party to the dairy industry, he brought an impartial perspective that helped to test existing assumptions and future priorities. His extensive experience in public life, regional development and agriculture brought considerable expertise to the development of the plan.

We thank John for his leadership and commitment to the industry. With the release of the plan, his work is now complete.