Dairy's productivity under the senate spotlight

Chair of Dairy Australia James Mann and managing director Dr David Nation appeared before the Rural and Regional Affairs and Transport Legislation Committee.

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Victorian senator Bridget McKenzie pointed to recent assessments suggesting dairy productivity has been weak.

The latest productivity data from the Australian Bureau of Agricultural and Resource Economics and Sciences shows a relatively sharp decline in total farm productivity for the dairy industry since 2018.

Even before that, increases have not been large compared to other agricultural industries and Senator McKenzie asked about the difference between declining terms of trade effects and real productivity drivers.

Dr Nation said because dairy farmers were already very technically efficient, to increase productivity further had been a significant challenge.

"Underneath that, we are making great strides in animal productivity - the cows are of today are very different to those of ten years ago," he said.

"And we are seeing amazing increases in productivity in water use."

Dr Nation said big improvements in productivity based on research and development in the area of grass were expected to flow through in the coming 15 years.

Dairy Australia's new climate change strategy, 12 months in the making, was also presented to senators.

Dr Nation said the big service provider was being very deliberate in focussing its attention on climate and that had cascaded through to extensive work programs in regional development programs.

Senator McKenzie: "Is there broad industry support on the ground for these initiatives because I'm led to believe there is not?"

Dr Nation said farmers know they have to be able to thrive in a warmer and more unpredictable climate.

"We believe we are already elite on a global scale for our methane emissions and we want to remain in the top ten globally," he said.

"The strategy also speaks to how serious we are about sustainability. And it speaks to investment and demonstrating to the market the industry is committed and working constructively towards climate change."

Mr Mann, a South Australian dairy farmer, told senators that after a number of very challenging years in the dairy industry there was now more positivity, as validated by Dairy Australia's annual national survey.

"The data shows a significant and widespread improvement in farmer sentiment on the back of improved farmgate milk prices, and more favourable seasonal conditions," he said.

"Positivity about the future of the industry has now lifted to 64 per cent, from low of 34pc in 2019.

"Business outlook has also improved, with 88pc of farmers expecting to turn a profit in the current season."

However, access to labour remained a constraint, he said.

"A total of 29pc of dairy farmers are hoping to recruit staff in next 12 months but are finding the process increasingly difficult in the wake of COVID," Mr Mann said.

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