S E C T I O N 1 : W H A T W E D I D
PLANNED OUTCOMES FOR THE AUSTRALIAN DAIRY INDUSTRY In 2006/07, Dairy Australia refined its strategic focus to address three core business objectives: 1. Increase farm productivity; 2. Maintain and develop high margin markets, channels and products; and 3. Promote and protect the unique benefits of Australian dairy. The strategies to deliver on these objectives were first set out in Dairy Australia’s five year Strategic Plan (2007- 11). Below is a summary of the key strategies and outcomes. The outcomes are mapped in a simplified fashion against the three business objectives but they also reflect the closely integrated nature of Dairy Australia’s work. The outcomes of strategies designed to achieve each objective complement and support the achievement of outcomes delivered under other objectives. Chart 5: Dairy Australia’s strategic summary 2007-11 MAXIMISE SUSTAINABLE WEALTH CREATION FOR AUSTRALIAN DAIRY FARMERS S E C T I O N 1 : W H A T W E D I D INCREASE FARM PRODUCTIVITY MAINTAIN AND DEVELOP HIGH MARGIN MARKETS, CHANNELS AND PRODUCTS PROMOTE & PROTECT THE UNIQUE BENEFITS OF AUSTRALIAN DAIRY o Adopt whole-of-farm business management approach to improving farm margins o Create better linkages between R&D and Extension to increase the adoption of new systems, practices and techniques on-farm o Improve capability and capacity, decision-making and business system support o Maintain and secure access to established and newmarkets o Provide the infrastructure for commercial innovation o Capture and share knowlesdge and market intelligence for industry benefit o Facilitate an effective policy development infrastructure within industry o Promote dairy product benefits to consumers and other key community and commercial decision-markers o Protect and manage the dairy industry's reputation as a responsible and commercially-sustainable producer o Create active preferences for Australian dairy in selected export markets o Ensure regulatory frameworks facilitate rather than hinder sustainable dairy production and processes o Return farm productivity to 2 percent per annum o Reduce on-farm feed input costs via increased home grown forage o Increase the productivity of dairy cattle through improved herd selection and on-farm management o Improve the skills base to assist in balancing the physical, financial and family elements of farming o Improve decision making and investment decisions via information collection and analysis o Transform bioscience and technology research into commercial opportunities to deliver cost reductions, new products, increased industry capability and innovative culture o Implement and manage a commercially focussed innovation delivery centre o Achieve trade reforms that improve industry returns o Maintain the right for Australia to trade in high value markets of its choice o Increase awareness of the different quality of dairy product attributes o Maintain the margin of dairy products over vegetable products o Maintain a positive consumer perception of dairy through the media o Encourage appropriate daily intake of dairy for targeted consumer segments to improve nutrition and weight management o Influence health professionals to recommend the appropriate daily intake of dairy for patients o Foster a positive nutrition-related regulatory and policy environment o Elevate the profile of the dairy industry and its importance as a contributor to the Australian economy o Maintain the right to operate through responsible resource management Strong economic and social positioning of dairy in Australian policy and financial sectors leading to improved security of access to necessary resources and investment Better understanding of market challenges, the implications for industry and for how Dairy Australia can better align it activities to industry needs A cost effective framework for assessing risk/ opportunities to industry and the implications of key structural and environmental changes on business growth and future profitability Protect the dairy industry's domestic and export markets Ensure the dairy industry is seen as leading edge, collaborative and Dairy Australia recognises the integrated nature of dairy production and marketing and the potential affect of changes in one part of the dairy supply chain on industry profitability and sustainability at all levels. Therefore the Company takes an holistic approach to delivering outcomes. By maintaining this approach, the Company increases its value and effectiveness, while maximising its flexibility to adjust to changing industry needs. The need to take an holistic approach can be illustrated in a number of ways. Farm profitability and sustainability depends directly on farmers being able to adopt farm business and decision making systems that will effectively address emerging challenges on resource availability and complexity. Gains on-farm can also have positive effects for down-stream processing sectors. At the same time, farm sustainability is inextricably linked to the dairy industry having continued access to profitable and growing market outlets for milk and its myriad components. The industry’s sustainability is also based on broad community recognition of the inherent qualities and value of dairy at a product and industry level. Dairy Australia’s core business objectives recognise these linkages. They also reflect the extra value that Dairy Australia can generate by fully leveraging its existing resource base and taking a cross-functional approach to strategy development, business program resourcing and delivery. Dairy Australia’s strategies are implemented through a series of strategic programs managed by the following business groups: o Farm Productivity & Delivery (FPD) o Technical Issues (TI) o Value Chain Innovation (VCI) o National Marketing (NM) o Trade & Strategy (TS) o Corporate Affairs (CA). Corporate Affairs (CA), Corporate Services (CS) and Human Resources (HR) also run programs to manage various stakeholder relationships as well as providing essential corporate development and support services. Chart 6 on the following page sets out the core programs Dairy Australia invested in during 2006/07. The positioning of the programs is based on their primary objective fulfilment. This table does not reflect the rich cross functionality between many of the programs and the business groups that manage them. The progress made by each program during 2006/07 is detailed in the Program Performance section beginning on page 43.