The ongoing impact of COVID-19 and the increasing role of consumer trends were a primary focus of the 2021 McColl’s Annual Industry Day.
Bringing together representatives from transport and food production organisations, the event was held in Northern Victoria and saw attendees from Fonterra, Lactalis and Saputo among others.
Key speakers included Michael Harvey, Senior Analyst at RaboBank, who shared data insights on trends currently affecting local and worldwide markets with global economic drivers another of the main items on the agenda.
Sustainability and the environment, driven by regulation and industry leaders, remained a primary focus of the sector and was confirmed today with the release of an industry report by Dairy Australia.
Many of those in attendance agreed that reducing emissions in the supply chain was an important issue, however the cost of mitigating CO2 remained a barrier.
John Droppert, Industry Insight Manager at Dairy Australia, reported that the combination of strong farm gate prices and increases in pasture growth led to strong returns for the year.
However, at this stage dairy production volumes have not risen.
The discussion shifted to returns to previous higher milk production levels in Australia and how best to facilitate increases in volume.
Robust domestic consumer demand and population growth were economic drivers that continued to provide positive signals for dairy farmers.
Participants expected that longer term pricing contracts between processors and farmers would lead to herd investments and production volume increases.
Farmers had just enjoyed one of the best seasons in recent memory thanks to friendly seasonal conditions around the country which had improved operating conditions at the farm gate.
Despite wet weather suppressing irrigation water prices, milk production growth was constrained by a smaller national herd, labour shortages and continued farm exits.
Sofia Omstedt, Dairy Australia Senior Industry Analyst said farm exits had continued as a result of strong land and beef prices.
“The distinction between profit and production in debating the performance of the industry is vital this season,” she said.
(Image: Michael Harvey, Senior Analyst at RaboBank).