Most farmers recognise the strength of current dairy prices. The National Dairy Farmer Survey reveals a shift in what farmers regard as the most important future challenges to their business: drought and climate variability have overtaken milk price as the most important future challenge (28 per cent of dairy farmers). While this was a significant shift nationally, price remains the greatest challenge in some regions. The high prices for dairy products on the global market are the result of less supply from the traditional exporters of dairy combined with steady demand, which in turn is being driven by a strong world economy and improved perceptions of dairy, particularly in developing countries. The global market is likely to remain strong, driven by commercial demand rather than policy change which provide favourable price conditions. Helping dairy farmers respond to the drought was a key feature of Dairy Australia’s work during 2006/07. The following sections profile the phases of the drought response and other key program outcomes as well as a summary of program performance for all Dairy Australia investment and activity during 2006/07. CLIMATE LABOUR WATER COST OF OTHER INPUTS COST OF FEED PROFITS PRICE OF MILK % OF FARMERS DAIRY INDUSTRY DROUGHT RESPONSE Business group: FPD, T&S, CA Program: Phase 1 - National Drought Response & Recovery o $1.1 million industry-funded drought recovery response (phase 1) o Trusted information and support to help on-farm decision making o Widespread access to concise, critical information and a nationwide support network o Facilitated dairy farmers access to available government support initiatives With the 2006/07 drought providing major challenges to almost 90 per cent of dairy farmers across Australia, a nationally co-ordinated drought response was critical. Therefore, in early October 2006, Dairy Australia and the Australian Dairy Industry Council (ADIC) and its members established a national drought response management and recovery initiative. The response was co-ordinated by Dairy Australia and incorporated both an immediate action plan to minimise industry losses through the spring and summer of 2006/07 (phase 1) and a longer-term approach to best position the industry for recovery through autumn and winter 2007 and beyond (phase 2). The drought response drew heavily from the experiences of the Dairy Moving Forward program, which Dairy Australia set up to respond to the 2002/03 drought. Key lessons learnt from this program included: o The importance of supporting local and regional efforts and not duplicating activities; o The need for clear and factual information on which farmers could base decisions; o Effective communication and collaboration across the industry; and o Maintenance of regional networks. Dairy Australia provided $1.1 million to the national drought response and worked closely to align and optimise its work with that of the Department of Agriculture, Fisheries & Forestry (DAFF), ADF, Regional Development Programs, dairy companies and state Departments of Primary Industries in the affected regions. Part of this contribution went towards the funding of regional drought response co-ordinators in each dairy region and financial contribution to other regional drought activities. The Company also co-ordinated the delivery of information, technical support and people support activities. The drought response was important on two levels: to best position the industry to recover from the drought through collaborative action and leadership; and to ensure dairy farmers understood the choices available to them and could base their key business decisions on the realities of their industry and their own farms. The overriding objective throughout this period was and remains the need to minimise the impact on the dairy industry. A shorter rebuilding and recovery phase will better position industry to take advantage of the strong global demand and markets.
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