Shannon Notter

Farmer engagement key to profitability for Australia’s dairy industry

Australia’s dairy farmers need to be continually embracing educational opportunities to better adapt to industry challenges and drive future growth and profitability. That’s according to 2018 Scholar and Victorian dairy farmer, Shannon Notter, who with support from the Gardiner Foundation investigated global measures to increase adoption of research and development and identify what high performing dairy farm businesses are doing to maintain consistently profitable businesses.

Travelling across the United States (US), Czech Republic, the United Kingdom (UK), Ukraine, Kenya, New Zealand, Europe and South Africa, Ms Notter visited successful dairy businesses across various operating environments around the world, and industry leaders to identify methods and tools that are driving farmer engagement.

“Business operating environments are changing, which is creating a number of challenges for the dairy industry. To improve and maintain profitability, it’s imperative that the Australian dairy industry is proactively engaging with and adopting the latest research and development. The Australian dairy industry is well supplied in research and development, but the level of farmer engagement and uptake of key research outcomes that would drive business and industry growth is low. This is in stark contrast with what I saw in Ireland and New Zealand, where there were high levels of farmer engagement, uptake of research and development, and greater interaction with industry bodies.”

Encouraging farmers to better utilise research and development outcomes will create more sustainable businesses and enhance management potential.

“The promotion of research and insights from experienced farm advisors is creating an information rich environment from which farmers can draw new information and lift the capabilities of key decision makers within businesses. This has perhaps the greatest potential to lift the performance and in turn, profitability of the Australian dairy industry."

Travelling in Somerset, England, Ms Notter met with dairy farmer, Neil Baker, who has been able to experience successful business growth through a focus on production.

“Through greater education, the business has been able to increase productivity and profitability by focusing on genetics and improvements in scale and process efficiencies. Aiming to grow the dairy business to run 2,500 head, cows are milked three times a day through one 80 bail rotary in a high input, high output system. By engaging with educational opportunities and research and development progress, the Baker business has been able to grow by 100 cows per year since implementing change in 2008. Benchmarking against regional and national groups has been a pivotal tactic the business has implemented to maximise the potential of his operation.”

“Australian dairy businesses need to place a greater priority on setting clear business goals and targets, including benchmarking business performance. Implementing a clear industry-focussed strategy will facilitate greater profitability, sustainability, and drive confidence for further investment, growth and continual industry-improvement. The dairy industry is facing many challenges including changing consumer trends, increasing government regulations and increased volatility in both markets and climate which is altering the skillset required by farmers to operate sustainable, profitable businesses. In developed countries, we are seeing increased consumer demand for greater transparency in agricultural industries. The social licence of a number of key commodities including dairy, is under question in Australia with consumers wanting to better understand where the food they are purchasing is coming from.”

Ms Notter said the Australian dairy industry is in decline and enhancing business profitability is central to creating sustainable dairy farm businesses and better utilising growth opportunities in domestic and international export markets.

“The global demand for dairy products is increasing and the Australian dairy industry is well placed to take advantage in population and demand. Australia’s proximity to Asia, which is the largest consumer growth region, and Australia’s reputation for producing safe, high quality products, should put it at the forefront of growth and opportunity.

“In California for example, dairy farmers are experiencing restrictions on water usage due to the negative impact overuse is having on natural water systems. This along with competing land uses are causing farmers to question the long-term viability of dairy in this region. In comparison to other regions, Australia does not yet have these types of environmental regulations due to the less intense nature of dairy farming in Australia. However, due to climatic variability and water shortages, access to water for dairy farmers that in part rely on irrigation is becoming increasingly restricted. This restriction has reduced supply and in turn lifted the cost of water in these regions. This along with increased demand from higher value crops, has subsequently led to many dairy farms being unsustainable due to the rising costs of production.

“Increasing farmer education and engagement with research and development outcomes is critical to ensuring the industry is equipped to adapt to pressures and changing operating environments and maintain profitability and sustainability.”