In an Australian first a dairy company will track the milk quality, animal welfare and the sustainability of its 400 farmers in real time.
Sustainability has been a critical issue in the industry in 2016, after a price crisis that lead to a massive herd sell off and a drop in production to some of the lowest levels in 20 years.
Lion Dairy, which buys about 1 billion litres of milk from more than 550 Australian farms each year, said the Lion Dairy Pride Program will give farmers a way to measure, evaluate and improve farm practices.
“It has been developed by industry experts to help our dairy farmers improve their farm sustainability practices and to also acknowledge the areas they are already performing well in,” managing director Peter West said.
“Ultimately our aim is to work with our farmers to improve their farm’s sustainability and, potentially, their profitability.”
Farmers who participate in the optional program will be asked as many as 200 questions across five broad areas: milk quality, animal welfare, people, community and wellbeing, the environment and business management. They will then use computer software to monitor their progress in real time, with some of the information eventually to be shared with consumers.
“This is about providing our dairy farmers with the tools and templates they need to help manage day-to-day operations of their farms,” Mr West said.
“It is to help them set their business up for success through business plans, performance measures, budgets and planning for the future.”
Sustainability in focus after price crisis
The program came at a time when dairy farmers were desperate to find any way to return their operations to profitability in the wake of the crisis that saw prices drop to below the cost of production. The company at the heart of the price crisis, Murray Goulburn, announced in December that it had appointed global beverage executive Ari Mervis as its new chief executive and managing director, to start in February. His predecessor, David Mallinson, had been the interim CEO since the departure of Gary Helou in April, the same day the company announced sudden and retrospective price cut from about $6 to under $5 a kilogram for milk solids.
Processor Fonterra soon followed suit, leaving about 2,500 dairy farmers with a share in $200 million of debt as they were expected to pay back the difference between the two prices. Farmers that supplied other processors also felt the sting of plummeting prices, though smaller dairies that produced their own milk saw a surge in consumer demand for their branded milk.
The federal government offered concessional loans for Murry Goulburn and Fonterra suppliers, but they were criticised by the national dairy lobby Australian Dairy Farmers for not going far enough and for excluding other affected producers.
The group also called for a code of conduct to give farmers more warning of a price step-down to allow them to make adjustments to their production, and welcomed the introduction of federal legislation that would address the unequal distribution of market power.
Then president David Basham said he hoped it would address the issue of the two major supermarkets in Australia – Woolworth and Coles –selling home brand milk for $1 a litre, a discounted price he said was blocking processors form being able to get stronger prices.
Lobby group faces own challenges
Australian Dairy Farmers has also faced its own challenges in a tumultuous year for its members.
Shortly after the dairy crisis bit, the lobby group announced a restructure of its senior leadership, with Simone Jolliffe stepping down as president in favour of South Australian Dairyfarmers Association President David Basham.
He was re-elected in the role in November, but stood aside in early December in order to run for a seat in the South Australian state government. Victorian Terry Richardson will serve in the role in the interim.
But the organisation said the troubling year had brought it closer to its members, and with a good season on the horizon and plenty of grass growth, they were looking forward to 2017 with the hope that the strengthening world price would soon deliver much needed returns to farmers.