C H A I R M A N ' S R E P O R T
The weather dominated Australian dairy performance throughout 2006/07with floods, cyclones and drought all testing the dairy industry. But the undoubted resilience of dairy farmers has come at a cost. Farm debt increased as farmers out-performed early milk production predictions to deliver 9.57 billion litres for the year - five per cent less than the previous year and a remarkable result given the extremes of weather conditions. Encouragingly, there were signs of significant opportunity as dairy prices in international markets rose sharply during the year and will likely remain strong providing a sound base for the this coming year. The strong international prices and the demand for milk have placed significant upward pressure on the domestic market. The past year was also one of genuine maturity for Dairy Australia as a service organisation both in terms of its response to changing industry needs and in its execution of the roles expected of it by industry. Dairy Australia is still evolving as a service organisation and is by no means complacent, but I genuinely believe that the Company matured also in the eyes of the people it principally serves – the Australian dairy farmers. A levy on milk has existed in Australia in various guises for close to 100 years. In March 2007, Australian dairy farmers had the opportunity, for the first time, to decide on the levy rate. As part of the polling process, they were able to consult directly with Dairy Australia about the full extent of levy funding. Farmers were able to make a direct connection with their levy and its returns, not just on-farm, but from investments further upstream in the dairy supply chain. This connection also extended to the Dairy Australia Board whose members participated in almost all of the consultation meetings prior to the vote. The Board values and has benefited from the opportunity to be visible to farmers and it will seek to communicate the Company’s full worth to the dairy industry over the coming year. Dairy Australia’s maturity can also be seen in the breadth and depth of its staff’s skills in meeting real industry needs. The Company’s people play a key role in a myriad of industry initiatives: from protecting trade access and influencing biosecurity policies, to stimulating R&D needs on-farm and in manufacturing, to providing information that farmers need to make critical business decisions. The Company has matured in the way it invests levy funds, applying renewed discipline and benchmarks to investment performance and creating a new culture of collaboration and accountability among researchers who benefit from Dairy Australia’s partnership and seed funding. Dairy Australia has met with a good response from the research community as it shifted its strategy to funding fewer but larger research projects. This strategy is helping to generate a critical mass of research activity and talented researchers who are attracted by the continued investment in dairy R&D and the career opportunities.