Challenges and opportunities

The medium-term outlook for dairy is very positive based on population and income growth and changes in diet in a range of emerging economies in Asia and the Middle East and continued per capita growth in Australia

• While the demand outlook is positive, markets will be more volatile because of non-food related factors that affect income growth and demand. To remain competitive, the industry must identify and leverage growth opportunities, proactively promote and protect dairy, and enhance the industry’s skills and capability base

• Grain supply and availability is growing nationally but volatility in pricing will remain due to international supply and demand. While grain supplies will recover in the next few years, the production of biofuels still looms as a threat to dairy where purchased feed is a business input cost

• Australia’s farming systems can manage most climate change scenarios, but policy decisions need to be flexible to allow those systems to adapt further. The dairy industry must work with government to develop policies that give farmers the confidence and support they need to invest in their future

• Global economic recovery is increasingly being led by developing countries, but while global dairy demand is rising, prices and export returns remain subject to policy changes in major producer countries (like the EU) and to fluctuations in currency and finance markets

• Water policy will continue to be a key driver of dairy viability and success and the financial implications of an Emissions Trading Scheme and carbon tax remain to be quantified

THE LEVY WILL FUND DAIRY AUSTRALIA’S PROGRAMS TO MEET THESE CHALLENGES BY:

• Building confidence in and improved understanding of the industry’s operating environment to enable better decisionmaking at all levels of the industry

• Continuing to improve the analysis and communication of market and industry developments, and supporting and developing access to high value markets

• Providing market information and forecasting to help farmers prepare and plan for market volatility

• Supporting positive practice change through improved education and extension infrastructure

• Improving pathways to market for research and innovation

• Communicating effectively with industry on policy reforms and their implications

• Contributing to policy reviews through close-working relationships with government, and providing credible and robust analyses for policy makers

• Developing environmental measures to better report, manage and use natural resources

• Aligning and streamlining activities with other investors to optimise industry and community benefits

• Rolling out the Dairy Moving Forward Research, Development and Extension strategy to align investment with other funders

• Seeking opportunities for cross-sector collaboration