Category: AGvocacy

When people ask you to brief them on the Australian dairy industry it can become a very complicated story

Farmers in every state except Victoria supply Australian families. Most of the milk produced in Victoria supplies families overseas.

The majority of people who are contacting me share the same values. Like this lovely person who contacted me yesterday

My view is that farmers’ (whatever they’re farming) should be paid a price for their product that allows them to cover the true cost of production, that allows farmers to maintain/replace infrastructure, improve the land, provide for the welfare of their animals, care for themselves and their families and make a bit of profit as well. In other words, a truly sustainable farming system that takes into account economics, environment, people and animals. This can’t happen if people have a belief that food must be cheap. And this can’t happen if retailers keep underpinning that belief with ridiculous price wars.

Thoughts from behind and beyond the fence 

People in the main want to know

1. What impact has the $1/litre  milk price had on dairy farmers
2. When the $1/litre first hit the scene, were processors paying farmers enough (assuming that retailers were paying processors a fair price) or did the retailer change the price paid to the processor which resulted in a change to the price paid to the farmer
3. What do farmers think of the Coles’ dairy farmers fighting fund?
4. Who are the farmers most affected now by the MG price cut? What will be the impact in the medium to longer term?

The answer to question 1 and 3 is beautifully summed up in this article. Coles milk brand gets a sour reception  

“It’s incredibly ironic [the fund],” said Victorian dairy farmer Marian MacDonald. “Now that Coles are killing the goose that laid the golden egg they’re saying we’d better get some grain under their nose to keep the head up.”

Ms MacDonald said she didn’t want to look a gift horse in the mouth and welcomed the prospect of funding for dairy farmers.

“We love that [Coles managing director] John Durkan has had an exorcism,” Ms MacDonald said.

“Tell him we will forgive him for his past sins. We will even shout him a glass of milk, fresh from the cow.”

 

It is time Coles admitted that they are part of the problem and they can be part of the solution and this blatant PR exercise isn’t the solution.

The answer to question 2 is $1/litre milk severely impacted on milk processors supplying the Australian market and in turn this flowed back to farmers no matter what Coles said and the ACCC certainly called them on that one. See previous post on this here

Now to question 4. The next few months will set the scene for this and its going to depend on a lot of things First up the price for next financial year will be announced shortly. There are grave fears it will be some-where between $4.50 and $5 per kg of milk solids produced (this is Victorian lingo and I will find out what that equates to in cents per litre*). This price will cause genuine pain especially when a major processor ( who shall remain nameless) had indicated it would be closer to $6/kg/ms. There are also a number of other things out of farmers control. They cant control the weather and the weather has been very harsh. Water in irrigation areas has become very expensive.  As a result of tough seasonal conditions cattle feed has also become very expensive.  Its a very volatile world our farmers operate in. Kudos to them they are very brave to even consider farming

Beyond the economics farmers are in shock. They are angry and they have lost confidence.

Whilst Murray Goulburn was the initial villain, Fonterra’s response is despicable and I look forward to the ACCC report on their moral responsibility and acknowledging they need to do the right thing by the farmers who look after them .

This comment from their New Zealand CEO beggars belief

“What we are doing is drive (sic) every cent of money which we can out of Australia back to New Zealand shareholders in this extremely low milk price environment,” he said.    Source Fonterra robbing from Australia to help NZ

With a great response from Australian dairy farmer Karrinjeet Singh-Mahil

‘ Fonterra never gave any indication its milk price was not sustainable, and farmers were still waiting on information about a promised loan. There’s some pretty poor decision making in such a large company, both at the top levels of management, but also at board level, because one of the consequences of this entire situation is that Fonterra’s reputation has been irreparably damaged.The backlash could do long-term damage to the company’s key export markets in Asia’.

The solutions. Well I look forward to seeing what’s being put on the table and sharing them with you in my blog

In the first instance you can help by keeping your fingers crossed the Australian dollar drops to somewhere close to 60 cents USD  as this will help ensure Australian farmers milk is competitive in the export market

And and here at home ? You can help our dairy farmers by consuming more dairy products and telling Coles to get with it and admit they are a big part of the problem

 

#dairylove

*FYI My Victorian dairy farmer counterparts tell me this equates to 34 to 38 cents per litre and this NSW 6th generation farmer can assure you this is a disaster in waiting price especially when farmers were budgeting on 46 cents/litre

For farmers some good advice here from consultant John Mulvaney

The Project’s story #MilkedDry on the milk industry crisis on Tuesday night was very powerful and the stats show it resonated with Australians. Wow almost 20% of the Australian population have watched it.

As you will see this is not a ‘farmers crying over spilt milk’ story  this is farmers telling it how it is.

Click here to watch the video

Knowing the farmers in the story I can only imagine how hard it was for them to put their hearts on the line like this

There is no-one more passionate about the Australian dairy industry than Marian MacDonald. She has opened the door to her dairy farm and her family’s highs and lows on her blog Milk Maid Marian    to ensure the community gets the real story behind Australian dairy farming families

Marian, Wayne, Alex and Zoe

There have been over 15,000 comments with 99% being supportive of Australian dairy farmers and being very vocal in replies to people who aren’t.

Australians care about their dairy farmers and they are showing it and coming from a dairy family this is a wonderful thing to see. Thank you Australia

It is however clear the people who have commented on The Project Story have a very diverse understanding of the Australian dairy industry and I would like to use this post to clear up some of the misconceptions.

Q. Are the majority of milk processors foreign owned?

A. Yes, they are BUT the milk they supply is produced by Australian cows that graze on Australian family farms and this is the milk that Australian families buy in supermarkets. You can buy this milk with confidence knowing you are supporting Australian farming families and Australian communities. Australia also has Australian owned milk processors like Murray Goulburn and a number of smaller Australian family owned businesses

Q. Should humans drink cow’s milk?

A. I think the overwhelming scientific proof show that the answer to this question is a resounding YES. The science has consistently shown one of the reasons people in 1^st world countries live longer is cow’s milk is now an easily accessible, safe, affordable and nutritious part of our diet.

Q. Has $1/litre milk and the milk supermarket price wars significantly impacted on the Australian dairy industry?

A A big YES  YES YES Coles and Woolworths should be very ashamed ?

Q. Are Australian dairy farms factory farms?

A. No and as an example they are not this is one of the most intensive dairy farms in Australia.

Q. Are dairy farmers cruel to their animals?

A. I think the best way to answer this is in the following way. No-one is perfect including dairy farmers but let’s remember over 60% of RSPCA animal cruelty charges are domestic pet owners and farmers are less than 5%. If you ask the majority of dairy farmers why they dairy, they say it’s because they love milking cows and my experience is they do love their cows

Q. Do farmers deserve special treatment in times of crisis.

A. I will let the voters and consumers decide that one, remembering farmers in this country supply 93% (and 99% of the milk ) of the food we consume. In my opinion that makes the future of Australian farming and farmers very important.

Q. Can Australians help our dairy farmers?

A Yes you can.

• Firstly, just showing you care is the best medicine for our farmers’ mental health and its is clear from The Project’s story you do
• Secondly, you can show your support by using the hashtag #dairylove on social media
• Thirdly and most importantly 9 out of 10 Australians don’t consumer enough dairy products. Let’s fix this by buying and eating more dairy products as part of a balanced diet. Consuming dairy is good for your health, your longevity and good for farmers

Look what I found on the #DairyLove Facebook page – how gorgeous is this Ht Kathleen Johnston

 

 

We currently have a dairy crisis in this country. Not just for farmers and their local communities. A dairy crisis that will have ramifications for everyone’s access to this safe, affordable and nutritious dietary staple that takes pride of place in every family’s fridge – Top shelf no less

Action is needed now. Action that delivers long term results for our farmers and our communities and every-ones right to drink fresh Aussie milk.

For milk processors its all about their values . It goes right to the heart of their ethics

Its time for the processors to think long term. There is is no room for market opportunism and lining upper management pockets with bonuses. If we want to continue to provide Australians with the high quality dairy foods in this  country then the milk processing industry has to look after the farmers that look after them   Its great to see the ACCC will be doing their utmost  keeping them honest.

Today I am sharing Paula Fitzgerald brilliant op-ed piece from the Stock and Land  Dairy processors missed the memo. Paula has nailed all the issues and put plenty of solutions on the table

In 2014 the Australian dairy industry launched a new vision: “Australian dairy – prosperous, trusted, world renowned nutrition”.

Sadly, events over the last few weeks suggest that some processors, despite endorsing the vision, appear to have lost the memo.

They seem to be working in the opposite direction – taking away the prosperity of their suppliers, dairy farmers, and destroying trust.

Yes, we operate in a global environment and it is volatile.

At times unexpected events unfold.

But does this excuse poor behaviour?

Imagine an employee arriving at their office to be told that their income had been reduced by 20 per cent and as a result they would be working for nothing for the coming two months and their salary for the next financial year was yet to be determined.

Would the worker stay at their desk?

Would they produce their best work?

How would they break the news to their family?

What impact would this have on their mortgage, their budget, the adventure planned for the next school holidays?

This, in effect, is what thousands of dairy farmers have been told. It may be legal but is this ethical leadership?

On Wednesday night over 400 dairy farmers gathered in Terang in Victoria and I also attended the meeting.

These people were angry, distressed and emotional.

Some were looking for a scapegoat and a number of hopeful politicians addressed the audience, indicating they would “stand beside them” but none offered tangible answers.

Key dairy organisations had silent representatives in attendance.

Many ideas were thrown around but there were few solutions.

Some farmers want consumers to pay and others sought the reintroduction of a regulated marketplace.

Many in the room, including those who do not supply the companies responsible for this outrage, anticipate marching on Melbourne.

They want to stand by their fellow farmers and local businesses.

They want to grab attention, cause disruption, capture the minds of consumers, elicit response from governments.

What to do?

The affected dairy farmers need action now, not tomorrow, not next month but now.

Sure, there are activities for the medium and long term to ensure this scenario is not repeated, but for now, there must be a focus on the immediate.

The response requires collaboration and needs involvement from all and if those companies are committed to Australian dairy, now is the time to step-up if there is to be any hope of regaining trust or rebuilding confidence in a great industry.

To the affected farmers, be mindful that right now, the acronyms – ADF, ADIC, UDV, DA, FP – are largely irrelevant and your city-based cousins have no idea what they mean.

Right now you must work together, forget the past, demand tangible action, and harness the support of, rather than whinge to, city-based consumers.

You must tell your story in words they understand.

Be respectful.

Yes, you get up early and work late but so does the bloke trying to run a newsagent, not to mention he faces more traffic than you.

Explain your product is perishable; it cannot be stored in a silo or on a shelf for a better day.

Explain what producing milk requires – seed, fertiliser, water, good crops, healthy cows – and how much it costs.

Tell your story in words the city-based consumer can understand, tap into your shared values – hard work, a fair go, supporting a lifestyle, payment for goods delivered. Share your story with consumers, local decision makers, politicians and the media.

You can play a valuable role.

To the industry and government organisations, forgot the ‘who does what’, the attribution, the paperwork and the process.

Act now.

Where is the 1800 number for farmers to call?

Who are the skilled staff answering the calls?

Famers need a first-class consultant at their kitchen table – are they lined up?

Are they seeking out farmers, particularly those who traditionally shy away from help?

Are the banks proactively engaging with their clients?

Dairy companies, if you cannot revise your decision, have you made personal contact with each of your suppliers to ascertain their needs, work through options and support an informed and coordinated response?

Governments, work across borders, forget committees, allocate resources and in-kind support.

Now is the time for industry, governments and advocacy organisations to demonstrate leadership through collaboration and partnerships.

Make a real difference for the future of Australian dairy; rebuild confidence; and help farmers realise the vision.

#dairylove #compassion #ethics Well said Paula

Follow up

Interesting story by Andrew Marshall from The Land on Co-operatives here  with some cut and past comments below

“MG is a classic case of not being able to deliver on a business plan because market conditions – notably Chinese demand and our exchange rate – turned against them,” Ms Morrison said .

“Agricultural commodities are volatile.

“What’s happened at MG largely occurred because of a turnaround in commodity markets – it can, and does happen to any business.”

She said co-operatives had a proven record as major and trusted agribusinesses worldwide.

Big names such as Rabobank; NZ dairy giant, Fonterra; US-based multinational CHS,and Western Australia’s grain kingpin CBH were all successful co-ops.

Many overseas co-ops had institutional investors and “all manner of hybrid investment structures” not dissimilar to MG’s model which allowed for 40 per cent ownership by non-farmer shareholders.

“In MG’s case its farmer shareholders now have ultimate decision making power to manage themselves out of any difficult situation,” Ms Morrison said.

“Farmers supplying other overseas-owned milk companies have far less access to the levers and decision makers when management decisions turn against them.”

However, being in a farmer-owned co-op does not shield you from harsh market realities said group CEO with WA-based sheepmeat co-op WAMMCo, Coll MacRury.

“You still have to be disciplined about what you spend, and manage the business with a tight commercial focus on the end game,” he said.

“Murray Goulburn’s situation is very sad at the moment, particularly for farmers burnt by price cuts, but being a co-operative doesn’t make the problem different to what any other business would be going through.”

WAMMCo has more than 800 staff processing about 2 million sheep at abattoirs in Katanning, and Goulburn in NSW.

Mr MacRury conceded rural co-op profitability in Australia and NZ was often constrained by low margin commodities and limited access to fresh investor capital when upgrades and expansion were needed.

However, careful long-term management planning was likely to deliver rewards, including membership security, in the long run.

Successful co-ops also tended to foster a powerful co-operative business culture in their region, notably the NSW North Coast – home to Norco, the Casino abattoir, and Macadamia and fishing co-ops

Words are the voice of the heart

When your world seems to be full of more lemons than lemonade and you know that you are just one of many hurting you often find yourself trying to cope with both their world and yours

Farmers so often put our hearts into everything and when our hearts bleed we often find ourselves so confused we don’t know what to do.

Social media is a wonderful way for farmers to  come together and overcome the isolation and distance that separates us when we are most in need

Nobody champions this more than young people in agriculture. Today I salute two of them

Young wool farmer Emma Turner has a unique knack of capturing beautiful images from her family farm to share whats in her heart

Dairy farmer AGvocate Casey Weel has beautifully connected her feelings and her thoughts to create her Ode to the delicious, nutritious cocktail that is the humble glass of milk

What an opportunity   Surely it would be a delight for every photographer and every creative team to find the perfect combination of images  to leave a lifelong legacy  for these words and the emotion behind them.

thanks Emma and Casey as these cows said to the little sheep – No matter how big or how small – we are all in this together

Farmers everywhere share the same highs and lows.. They are committed and they are in it for the long haul.  Lets show some ‪#‎dairylove‬ and ‪#‎wearwool‬

Its amazing how powerful groups who work together can be

 

 

 

This is a long post that I have given a lot of thought. Anyone at all connected to the Australian dairy industry will know farmers have tough times ahead and they need all the support they can get

Upfront to me there seems to have been a lack of honesty and transparency from people the farmers ought to have been able to trust. The challenge now is how do we ensure that market opportunism doesn’t make a bad situation worse and the farmgate price decision makers realise now is not the time to feather their nest with bonuses and its time to look after the farmers who look after them.

Ht Rod Gribble 

These days I sit on the sidelines and feel others pain. My contribution now lies solely beyond the farmgate and my reflections below are from the other side of the fence

Last week I attended the PIEFA Food and Fibre Matters conference

To me PIEFA is an organisation that builds and nurtures relationships between agriculture, government, service providers, education experts teachers, students and industry

There were some phenomenal presentations from teachers, industry and education experts. See here

There were some great examples of success stories from both overseas and Australia.

US guest speaker Jay Jackman clearly defined the role of Ag-Educators (Teachers) and those whose role is Ag-Literacy (AGvocacy)

In the AGvocacy space the CEO of RIST Bill Hamill’s presentation tackled the elephant in the room “how do we balance the need to attract the best and the brightest to careers in agriculture with the realities of how financially and emotionally tough farming can be”.

The current crisis in the Australian dairy industry is a prime example and its heartening to see there are some people doing that very well

Before I share with you some of these lead by example media and initiatives I would like to share with you some of Bill’s findings that show review after review has identified poor image and perceptions of agriculture by young people as an impediment to the study of agricultural science and careers in farming.

Part of Bill’s PhD research aims to

 ‘To assist key stakeholders servicing the agribusiness sector to adapt the language they use to describe their industry and careers in order to positively engage with the Generation Z students and increase both the number of enrolments into agricultural science and the pursuit of careers in agriculture more generally’.

Below is some of Bill’s previous findings as well as some of his PhD preliminary findings

• Gen Z
  • are worried about financial insecurity.
  • Are looking for positive and engaging careers.
  • ‘work to live’
  • are more likely to pursue a career in agriculture if they were introduced to it at an early age with practical and positive hands on training.
• Key influences
  • Parents have the strongest influence on young people’s career aspirations.
  • Employers have a strong influence on retention of young people in agricultural careers.
  • Language and images used by the industry have an important connection to attraction and retention.

Bill reviewed

• Rural Newspapers – 150 front pages selected in years 2011 and 2012 (VIC, SA, NSW, WA)
• 20 submissions to Government Inquiries by farmers, industry spokespersons, government (2003, 2012 x3)
• University web sites (provide degrees in Agricultural Science) x 2

His preliminary findings found that whilst only 18% of jobs are behind the farmgate the discourse of agriculture is focused about the farm and activities related to farming and there are four sub – discourses tied into this:

• Negative discourse on farm income – 52%
• Negative discourse on instability within the industry -39%
• Negative discourse of the stereotype of who represents agriculture – male, old, poorly presented – 63%
• Negative discourse of the work environment of agriculture – 30%

Bill used this quote from 2013 to make a point

‘With farmers across Australia struggling to maintain their financial stability in the face of continued dry weather conditions and other challenges, including fluctuating commodity prices and rising rural debt, the increase to the national minimum wage had the potential to create a further cost burden to the agriculture industry’.   CEO National Farmers Federation

Post Bill’s presentation I had a conversation with a farmer I admire greatly who has spent a lot of time in the political lobby and AGvocacy space and she reflected by saying ‘our leaders use this type of language because they think this is what their farmers want them to say’

Bill summed up his presentation with

Ask not what ‘they’ can do to make agriculture more attractive for Gen Z, ask what you can do to promote agriculture as a positive and fulfilling career to the next generation.

At the moment that is a tough call in drought affected areas across Australia and in the Australian dairy industry.

Some questions we could ask ourselves are

• Do we really want our industry leaders to share the doom and gloom stories?
• Do we want sympathy or empathy?
• Who do we want to hear from when times are tough

I think in the main farmers want to hear from trusted voices with skin in the game.

As always dairy farmer blogger Marian MacDonald is showing great leadership  See here

Farmers want to hear from industry leaders who are doing more than talking

Loving this media example from David Basham SA Dairy Farmers Association President who is leaving no stone unturned.

1. We have already spoken to the SA Minister for Agriculture’s office to ensure the Minister has an understanding of the implications this situation may have on the dairy industry here in SA.
2. We have also spoken at length with the Federal Assistant Minister for Agriculture, SA Senator, Anne Ruston.
3. We are seeking indications from other major dairy processors operating in SA regarding the probability that they will re-evaluate their prices for the current year.
4. We are also seeking an indication from the companies on their ability to accept extra supply.
5. Our incoming CEO, Andrew Curtis has written by email to all affected members offering the support of SADA in the days and weeks ahead.
6. We are also speaking with financial institutions and others regarding the ramifications of this decision. We would be happy to discuss our findings with all members of SADA
7. We will continue to engage with Murray Goulburn staff and staff of other processors to encourage them to talk directly with their suppliers and discuss the current situation and how this will affect the suppliers going forward.
8. We have also spoken with Rural Business Support (formerly Rural Financial Counselling Service) to alert them to the situation and would encourage dairy farmers to make contact with them to help may have on their businesses.

“Our concern is the health and wellbeing of our farming families, and also the service sector that provides such valuable support to the dairy community.

As soon as we are confident we understand the long-term implications on farmers and the dairy communities we will be contact again with our member” David Basham

Farmers also want to know government and the community care.

Dairy farmers Diane Bowles and Catherine Jenkins have created a great iniitaitve that is allowing farmers to help support each other and also invite the community to “show some #dairylove” Story here and join the Facebook page here

Show some ‪#‎dairylove is a group created to support our great Australian dairy farmers and to encourage everyone to buy more of the world class dairy products produced by caring farmers. Eat more dairy and show us your #dairylove!

And whilst dairy farmers have traditionally given the ‘suits’ a bit of a hard time they too have an important role to play and Dairy Australia has ramped up Tactics for Hard times

Blurb  Dairy Australia will ramp-up the rollout and use of DairyBase to assist dairy farmers in revising their budgets for 2015/16 and developing budgets for 2016/17.

Dairy Australia is examining all of its support programs to see where it can adapt, adjust and respond with relevant advice, information and support. It will also support the efforts of milk processors and other dairy community service providers.

According to Alison Ledgerwood in this TEDxUCDavis Getting stuck in the negatives (and how to get unstuck) farmers are not alone and people in general have a fundamental tendency to tilt towards the negative. Her research has shown that it easy to move from a positive view of things to a negative view but far harder to shift from negative to positive.

Alison tells us

Literally this takes work. This takes effort. And you can practice it. According to Alison you can train your mind to do this better.

We can also rehearse good news and share it with others. We tend to think great that misery loves company that venting will help get rid of our negative emotions, that we will feel better if we just talk about how terrible our day was. And so we talk. And we talk. But we forget to talk about the good stuff.

And yet that’s exactly where our minds need the most practice. So my husband who has this disconcerting habit of listening to what I say other people should do and then pointing out that technically speaking I’m a person too has taken to listening to me for about two minutes on days when I come home all grumpy and complaining about everything. And he listens. And he says okay but what happened today that was good.

And so I tell him about the student who came up to me after class with this really interesting insightful question. And I tell him about the friend who emailed me out of the blue this morning just to say hello. And somewhere in the telling I start to smile. And I start to think that maybe my day was pretty decent after all.

I think we can also work in our communities to focus on the upside. We can be more aware that bad tends to stick. Our minds may be built to look for negative information and to hold onto it. But we can also retrain our minds if we put some effort into it and start to see that the glass may be a little fuller than we initially thought.

For all those dairy farmers desperately looking for the positive I have reprinted this glass half full review of the Murray Goulburn situation on LinkedIn by former CEO of Dairy Connect Mike Logan

What went on at Murray Goulburn? Will you be disappointed? Or, is it an opportunity?

 Since leaving the dairy industry representative body Dairy Connect last month, Murray Goulburn has been in the news and I have been asked my view. While not having any skin in the game any more, I have been sufficiently involved in the dairy market to have considered it. 

I can say this; Gary Helou and the MG Board have tried to do something different in an industry that desperately needs a fresh approach. That they have not yet succeeded is a pity, but it is time that is needed.

Time and financial markets are not friends. 

Gary Helou came in and attempted to modernise a very old and conservative company. MG needed to approach the future with a new strategy because the world is changing rapidly and so should MG. Without doubt, Helou was brought in to do that. It was never going to be pretty, but it is still needed.

To achieve a new future, the MG Board decided they needed new markets and a new capital base. The old focus on commodity dairy products had led to low farmgate prices and no growth in their supply base. Their members were getting restless as the looked across the creek to the successful CuzzyBro’s at Fonterra. 

Fonterra’s capital base and government underwriting had made them unassailable in the commodity market. MG had to do something different. MG envies Fonterra’s protective legislation but has to work within the rules of our post-deregulation, crazy-brave competition system. 

Coles

MG got into bed with Coles. Every supplier knows that when you get into bed with Coles you should cinch up and prepare for a rough ride. MG won the Coles private label fresh milk contract in NSW and Victoria after a very competitive and value destroying bidding process. The Board decided to invest in two new factories to supply fresh milk into those markets. 

We heard all the usual hyperbole of state of art/automated/world class/capacity for growth and so on. There is probably no margin in that contract even with the new factories. 

They were investing in a market that was (and is) oversupplied in those regions. Neither NSW nor Victoria needed new fresh milk capacity. It was already well supplied with sufficient but antiquated capacity. Subsequently, the Sydney factory is remarkably underutilised. 

Devondale Fresh Milk

They thought the way to create value from the deal with Coles was to develop their own branded, higher value fresh milk. The Devondale branded fresh milk has not been the success the Board would have reasonably hoped for. It has been discounted as low as 75c/litre so it has been worth less than the Coles homebrand product. 

All of those that are expert in branding questioned the strategy. Simply, building a new brand that has no point of differentiation (unlike a2) is only a function of money. You have to buy the brand space. This may not work. Demonstrably, it didn’t. 

You may have seen their advertising? It made the appallingDairy Austalia Legendairy advertisements look good. One was so bad that it was declared racist.

Capital Raising

In the middle of this, Warnambool Cheese & Butter came on the market. Humility was turned to hubris and the bidding was absolutely stupid. The wiley Barry Irvin came out of the bidding war with dignity intact. He made a quick $100million for Bega.

MG too made serious money on the ending of their shareholding in WCB. Dairy was gold and they had gold. 

MG needed a new capital model and the time was ripe. They followed the old adage – when everyone is buying, you sell.

As a Co-operative in Australia their choices are limited. They came up with a creative solution where they raised a unit trust to support the Co-op’s balance sheet. Then they connected the dividends of the unit trust to the farmgate milk price. They are not a Co-op any more, and not a fully listed corporation. They are half pregnant. The current situation is undoubtedly awkward to manage.

All of the talk about $6/kg farmgate milk price held up the Unit Trust and made the farmers feel good about their new business partners. The MG Board and their CEO, Gary Helou fell for the old trap of over promising and under delivering. 

Suddenly, they were not only a half pregnant Co-operative, but the investment market was soon going to find out that they needed a shotgun. The unconsummated pregnancy has not delivered sufficient satisfaction.

Infant Formula

Finally, here is where they went right. The board has agreed to a series of offshore partnerships to deliver infant formulaand other products to the new and emerging markets. These are yet to bear fruit. The global dairy market has tanked on the back of some unfortunate political circumstances in Russia and the Chinese who overbought Whole Milk Powder to a never-seen-before level of stocks to use. The WMP powder price literally burst like the bubble it was. These are political and market circumstances that the investment market should clearly understand. To add insult to injury, the little Aussie Battler went north to 76cents.

The demand fundamentals of the target export market are unchanged. The demand for manufactured and branded milk products from reliable safe suppliers is growing at a steady and remarkable rate.

Murray Goulburn’s strategy of developing supply capability in partnership with its customers to deliver high value, branded and packaged dairy products such as infant formula is well thought through. The NSW dairy industry suggested this to MG nearly four years ago and was laughed at but they have since seen the light very clearly. 

That market is now recovering and the strategy should work. 

It will work soon – but not soon enough for the impatient investment market who want results every quarter and damn the future. 

Helou sent packing

The Board, probably at the behest of the investment markets, have taken out the shotgun and put Helou out of his misery. There is much dancing on Gary’s grave.

Helou should be recognised for trying to change things. He gave it a go and good on him. It is better to have tried and failed than never to have tried at all. He came from the outside of the industry so he was never going to be a favourite. However, everything he did was most probably with the approval of the MG board.

Where to from here?

There are three sides to the question, what should the investors do and what should the farmers do? But finally, what should the Board do?

Investors:

The investors came into the unit trust in full knowledge of the circumstances of the milk price and their dividends. They also knew that it is agriculture in a rapidly changing global market. At the moment, the situation looks grim, but the fundamentals are good. The investors will do what investors do, but they are only holders in a unit trust and they usually have the forsesight of a rear view mirror.

Farmers:

They farmers are the ones feeling the pain but they are the ones that should be the adults in this situation. They should stick with their co-operative and encourage the Board to deliver on the longer term strategy. 

Board:

Directors should now brace themselves for a tough ride, but continue to assure the farmers – the suppliers to their business – that the strategy has had a few setbacks, but is still correct. They should tell the investors to look through the windscreen. 

Now everyone is selling, should you buy?

Show some #dairylove because you might just be the light at the end of the tunnel for some-one else

 

 

The people I care about most in the world dairy – more and more I realise how brave farmers across the world are

Its a truly noble profession surely it should not be this hard

No-one tells the story of the highs and lows of dairying from the heart better than Milk Maid Marian

Today I am  reblogging her magnificent post on the current crisis impacting on the Australian dairy industry

Despair, Anger, Disbelief

Lots of dairy farmers are naturally cynical and, let’s face it, we’re never entirely happy with the weather forecast. But we are optimists at heart because things will always be better next season.

Not this season.

I have never seen my fellow dairy farmers so subdued as they were at a meeting last night. Dinner at the local pub was laid on – a rarity that normally guarantees a festive mood – but somehow it felt like more like a last supper. Nor have I seen such anger online.

Partly, I think, it comes down to being battle-weary. Around here, it’s been a disastrous season. Dry-land farmers have not been able to grow grass and the La Nina we were hoping for still hasn’t arrived. By now, we should be building a wedge of grass to get the cows through winter. Instead, paddocks are eaten to the boards while farmers wait for resown paddocks to fire up.

The conventional wisdom is to apply nitrogen now while the soil’s still warm enough to grow grass. Many farmers at last night’s meeting had not applied any urea yet despite its unusually attractive cost this year because the soil is still too dry.

We can buy in more fodder or sell more cows. Fodder is getting hard to find and expensive, too. Many of us have already culled hard. The options are narrowing. We need something to go right.

It isn’t. Farmers seem sure that the milk price for 16/17 won’t be good. Will it be devastating? We’re all wondering and worrying.

On top of all this came the Murray Goulburn announcement that it had overspent this year and will have to claw money back from farmers for the next three years. None of it makes sense. Many farmers had hailed the MG plan as visionary, something that would transform our industry to create sustainable prosperity. But the loss of so much money in so little time is incomprehensible.

It’s a blow from left field that will leave barely a Victorian dairy farmer untouched. MG is the pacemaker for the entire industry. Processing half our state’s milk and 38% of Australia’s, it sets the benchmark for the southern farmgate milk price. When it falters, we all do.

In the face of all this, the message from last night’s speaker was simple: seek help, watch out for your neighbours and don’t lose sight of the vision for your farm. Good advice.

 

Making flour at the GRDC stand in the Food Farm at the Royal Easter Show 

There is no denying the Sydney Royal Easter Show is a huge opportunity to show people where their food comes, meet a farmer, learn how to make tabbouleh, crush wheat, make pastry, learn how to wash your hands properly, learn that cotton grows on plants and wool grows on sheep,that tractors are huge, that girls are farmers too and you don’t have to be a farmer to be part of the industry that feed and clothes us. Believe it or not you can do all that ( and lots more) in the just one pavilion – The Food Farm which is run by the RAS Ag Development Team

Now as you can imagine SRES costs an absolute motza to run and if you are a farming industry and you would like to expose your farmers and the things they grow to the 1 million people who visit the show it can be an expensive day out for your industry in set up costs, staff time and travel and accommodation so if you are going to do it you better do it well.

This year farming industries had a new opportunity to have conversations with primary school students and teachers at the Primary School Preview Day which was held on the day before the show officially opened.

The brief was to run fun, interactive 15 minute workshop for five schools. The Art4Agriculture team frocked up and partnered with Greg Mills, Cotton Young Farming Champion Laura Bennett and all things wool industry Guru Fiona Raleigh.

We wanted the take home messages from our workshops to centre around

1. Everything around me is connected to farmers and farming
2. Farmers are important to me

To reinforce this we borrowed some ripper little devices from the NSW DPI that allowed us to run a quiz.

We firstly used cotton as an example of the diversity of things in our everyday lives that contain cotton 

Just to ensure the kids knew how to work their computers. We asked this question

then we got stuck into it

 

And there was plenty of hands on products to show the answer to all of those questions was “all of the above”

 

 Wool Guru Fiona Raleigh then gave the students the ‘wool experience’

So what did the kids learn – as it so happened we had an Archie in hand that was painted with blackboard paint and we invited the students to share with us what they learnt

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We had very sore feet at the end of the day and we were pleased when it was wine o’clock and everyone had fun and learnt a lot including the farmers

 

Last Wednesday I was invited to Melbourne University to talk to the  2^nd year climate change students. This subject  in the main deals with what to do about climate change, rather than the science. A bit more detail can be found here. My brief was to give a farmer perspective on climate change, in other words how farmers adapt to climate change and how information about climate change is driving real-world, practical farming solutions.

Now this is a topic I love. Spruiking about farmers how are leading the adaptation charge and how cows are inspiring the world by proving you really can produce more food using  less natural resources.

I  was also  invited to talk to a precision agriculture meeting on campus that day, where a group of researchers were wanting an industry/farmers perspective on the issue.  The background was  ‘the cropping industries have seen significant advances in precision agriculture, the grazing / livestock industries have lagged behind. However, there are now some quite significant developments taking place in cloud-based technologies, animal tracking, sensors etc that can make a big difference to assist with livestock management’.

Now whilst precision ag really excites me this a topic I know “bugger all’ about. But I know heaps of people who do. So I had a lot of fun tapping into the experts on this one

 Wow you have only got to look at this diagram showing the farms of the future to see what an exciting place agriculture is.

But are we getting that message across to teachers and students? It would appear not. Surveying teachers and students as part of The Archibull Prize reveals we have a long way to go.

The first misconception is teachers dont think jobs in the agriculture sector are a good career choice

So do they know much about the jobs we have on offer ?

Well we definitely need to work on this one

So what jobs are front of mind for teachers?

Wonder why the dairy industry is so prominent. Well schools are not going to be exposed to the dairy industry as part of The Archibull Prize so looking forward to students and teachers identifying the plethora of importunities in grains,  wool, cotton and sheep and cattle industries

Now in the past our sector has played with name changes in an effort to sexy up industry image. How did that work for us? We asked the teachers advice about whether that was a smart move

 It would appear all we were doing was muddying the waters. But lets not get too overwhelmed by this. We are not alone. It would appear scientists feel a bit misunderstood too. I recently saw this

Think all scientists are lab-coat wearing, bunsen-burning geeks? Think again. Scientists come in all shapes and sizes and with Brain Box you can get to know the wonderful brains behind the science. Watch the interviews below, subscribe to our YouTube channel, or  see more here :

The Archibull Prize is off to a good start this year. We will be showing careers in agriculture to a broad range of students

And we will be sending in some inspiring young people who have chosen agriculture related careers to influence the conversation. Meet them here   They are all relishing the challenge. Looking forward to their insights on how we change the conversation

 

Yesterday at the invitation of Melbourne University I had the opportunity to speak to their 2nd environmental science students on the challenges of farming in a carbon constrained world.

Joining me was Stan  Krpan CEO of Sustainability Victoria . Stan had some very interesting insights into community engagement which I look forward to sharing with you in a later post

Talking about the challenges of farming this story  ‘Woolworths pulling broccoli from shelves after redbacks found’  which featured on my TOP AUSTRALIAN HEADLINES media feed this morning bought a smile to my face

Integrated pest management otherwise known as IPM in the world of agriculture is an environmentally sensitive way of managing pests. It uses a combination of practices and control methods to prevent problems from occurring rather than dealing with them after they have happened. IPM control methods include biological control, using predators, parasites or microbial pathogens to suppress pests.

The goodies or the heroes in biologcial control are known as ‘beneficials’ – with lady beetles being the well known example – mmh  never dreamed “redback spiders’ would wear the superman suit

Looks like this broccoli was a little too fresh from the Fresh Food people – it seems there is a lot to be said for  very cold storage

 

 

Excitingly for the agriculture sector farming in the 21st Century in 1st world countries is attracting people from all walks of life with diverse careers pathways who bring new specialist skills sets and knowledge to the farm family business boardroom table.

2015 Young Australian Farmer of the Year Anika Molesworth family is a very interesting example of the knowledge and skills diversity farming is attracting.

Lindy, Anika and Simon Molesworth 

Anika has worked as an agribusiness banker and spent most of 2015 in Laos researching her Masters in Sustainable Agriculture. As her father Professor Simon Molesworth AO QC will tell you “Anika always had a deep-seated belief that she should help those less fortunate. When she left school she went to Ghana for several months to work with underprivileged children. Ghana and Laos really demonstrate she sees that need and she also understands that if you get the perspective of different challenges in different parts of the world you actually get a more balanced approach to your own country.”

Anika’s parents work in the multiple fields of geology, environment, conservation, heritage and town planning and her brother is a senior adviser to the man who holds the purse strings in this country.  Their farm is located in the very harsh climate at Broken Hill

Anika acknowledges she is very lucky to come from a privileged background and its this background that has opened her yes to the big picture and the realisation that finding the solutions to the world’s problems is a shared responsibility and each and everyone of us can use our compassion and knowledge and skills sets to make a difference

Anika met the president of the Australian Conservation Foundation (ACF)  Geoff Cousins  when she joined him on the panel at the Climate for Change debate at UNSW in November last year. So impressed  was the ACF team Anika they subsequently funded her to attend the Al Gore 2016 Climate Reality Leadership Corps last month in the Philippines

This is Anika’s story through her eyes of her  trip to the Philippines ………

A visit to the Philippines is a powerful reminder that we are dangerously pushing planetary boundaries. Densely populated, widely impoverished and geographically exposed, the Philippines is one of the world’s most vulnerable countries to climate disasters.

Filipinos take no day for granted. Etched into their consciousness is the frailty of life. The country is subject to extreme weather events, risking sea levels, changing temperature and precipitation trends. The magnitude of the changes are already having real consequences on lives, livelihoods, food security and water supplies.

Filipinos walk a tightrope between paradise and hell on Earth.

It would take a lifetime to explore all of the 7,100 islands that make up the Philippine Archipelago, and even longer to understand the culture and life that exists here. A week in the Philippines gives one only a mere snapshot of the country – a glimpse I welcomed when the opportunity arose last month.

The 2016 Climate Reality Leadership Corps brought together people from all over the world with the vision and energy to tackle the greatest threat to our planet – climate change. Seven hundred proactive visionaries collaborating to wield the collective energy it takes to make systemic and transformative change. A group united by solidarity, hope and action.

I was invited to attend by the Australian Conservation Foundation – Australia’s premier organisation concerned with ecological sustainability – which also recognises the importance of farmers being part of the solution to deliver conservation success. Over the course of three days, participants heard from world-class scientists, communicators, organisers, strategists, innovators, and of course, the Climate Reality Chairman and Former US Vice President, Al Gore. The workshop taught the attendees how to share their story, to understand the science, and how to inspire hope for an alternative way of doing things.

This Leadership Corps was truly remarkable due to being the first post Paris COP21 and held in a country considered a moral leader on the climate change issue.

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The enigma and contradiction of the Philippines leaves one floundering to make sense of it all. From the chic and sophisticated Filipinos in Metro Manila drinking cocktails, to the scavengers of Smokey Mountain, Manila’s largest landfill, who are the city’s unsung hero recyclers. I listened in awe to the world’s best scientists at the International Rice Research Centre headquarters – who are tackling challenges that affect food production, such as drought, salinity and submergence. I attended Sunday mass with a thousand Filipinos singing praise to their god.

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I fell in love with the beauty of the forests, the sparkle of the ocean, the welcoming smile and hospitality of the Filipinos. And my heart was broken by the extremity of the poverty, the once pristine ecosystems disappearing forever, the city choking with traffic and pollution in part caused by desperate provincial people migrating to urban centres in hope of a better life.

My eyes were opened in a land of polar extremes. I departed feeling overwhelmed. The challenges this country faces are on a scale beyond comprehension. But with so many brave Filipinos speaking out, taking action, linking arms in defiance – and all the while with warm smiles on their faces – how can these obstacles not be overcome? I was inspired by the number of people dedicating their lives to bettering this country and its people.

The Climate Reality workshop reinforced to me that great people are doing incredible things right across the globe:

Arun George’s startup Avant Garde Innovations aims to introduce innovative, affordable and sustainable solutions – first to India, then the rest of the world – that take renewable energy self-sufficiency and energy empowerment to the next level through a distributed and decentralized approach.

 

Rina Teoxon Papio throws special mudballs into dirty rivers and waterways in the Philippines. Her organisation Earthventure Inc uses effective microorganism biotechnology to bring these precious water resources back to life.

Carrie Cort is passionate about children’s education, and through Sussex Green Living aims to inspire parents, carers, teachers and children to live a greener and more sustainable existence.

Sarabeth Brockley may live in New York, but her actions are felt much further afield. A Policy Analyst at the United Nations DESA-Division of Sustainable Development, Sarabeth spends her spare time sending care packages that promote social consciousness.

These are just a few of the people I met who are changing the world everyday for the better.

The Climate Reality Leaders came together connected by a shared apprehension about the state of our planet. They left armed with new knowledge and skills, connected to a network of doers, and motivated to drive the transition to a better future…….