Dairy Australia was forced to dig in to its reserves last year as the decline in milk production cut its revenue from dairy levies.
The organisation's financial reports for 2021/22, presented at its annual general meeting on Wednesday, revealed an operating loss of $502,000.
Levy revenue fell $1.095 million to $30.836 million.
Global economic woes also hit the organisation's investments, which booked an unrealised loss of $1.409 million.
The levy income shortfall is likely to continue this year with Australian milk production continuing to fall and with Australian dairy farmers having voted earlier in the year to hold the levy rate at the current level.
But both the organisation's chairman James Mann and managing director Dr David Nation told the AGM the organisation was committed to continuing to deliver a wide range of services for farmers.
"While farmers voted for no change in the levy, Dairy Australia will continue to sharpen its focus to invest in areas that matter most for farmers," Mr Mann said.
After the meeting, Dr Nation told FarmOnline that Dairy Australia had budgeted for the 2021/22 loss and would draw on its reserves.
"Dairy Australia will draw on reserves appropriately, in line with its financial planning and policies," he said.
It would also look for opportunities for external investment through partnerships, while maximising research, development and extension spending, which attracted matching government investment.
Dr Nation said the organisation reviewed costs regularly and would look to be efficient in managing costs and creating value for farmers.
"For example - a new lease has been signed to reduce floorspace in its national office," he said.
This new lease includes the rationalisation of floorspace by 25 per cent, which was in part enabled by post-COVID work arrangements, which offered staff a flexible work environment.
Questions from dairy farmers
Gippsland dairy farmer Bernhard Lubitz asked during the AGM what DA was trying to achieve in relation to the declining milk pool and farm cost structures.
Dr Nation said DA had identified labour and the availability of labour as the big issue for dairy farm business.
It had undertaken substantial new investment in workforce attraction with programs across all eight dairy regions and a national marketing campaign.
He acknowledged last year's decline in milk production was continuing this year.
DA's role was to focus on productivity and how it could invest to improve each farm business, he said.
NSW dairy farmer Phil Ryan asked what had been done about achieving the first commitment in the Australian Dairy Plan to reform industry structures, with a new dairy organisation to be operating by 2022.
Dr Nation said when the Dairy Plan did its annual review 12 months ago, this commitment had been recognised as unachievable.
Future work on this commitment would most likely involve not all organisations coming together into one organisations.
Mr Lubitz also asked what had changed since COVID-19 pandemic that meant the AGM was no longer being taken to other locations, as had occurred in 2019 when the meeting was held at Lardner Park in Gippsland.
Mr Mann said he and Dr Nation had visited all dairy regions during the year.
Dr Nation said the format of the AGM would continue to evolve.
This year's meeting had been done online, as had the two previous meetings during COVID.
"And one of the things we have seen is an increase in participation," he said.
"And that's what's most important to us."
Dr Nation said the meeting at Lardner had been excellent and other similar options would be considered in the future.
Elizabeth Ryan asked about the status of research into ryegrass pollen and thunderstorm asthma.
Dr Nation said significant studies had been undertaken into this some 10 years ago but DA had not been involved in research into this for at least five years.
"All of that research involved an act of genetic modification," he said.
"When there was an approach that was workable, there wasn't a commercial partner and there wasn't a willingness from the dairy industry to progress that through to market."
Great year for dairy farmers: DA chairman
In his address to the meeting, Mr Mann said despite the recent floods, 2022 had been a great year for farmers and the industry.
"Australian dairy farmers have had a year of high farmgate milk prices, driven by stiff competition for milk among processors," he said.
"Demand for dairy in the domestic market continues to be strong, and a reduced global milk pool also presents export opportunities."
Mr Mann said dairy was the third largest agricultural sector in Australia for the second year in a row.
"Consumption of milk in Australia is also among the strongest in the world," he said.
"This tells us dairy is a staple that is here to stay."
Climate was an important focus for DA.
"We must be part of the climate conversation and discuss issues such as how we address carbon and methane emissions produced by our industry," he said.
"The Australian Dairy Industry Council has committed to reduce greenhouse gas emissions intensity by 30pc by 2030.
"The Australian Government has recently signed the global methane pledge, and the dairy industry will be working to help the government meet this commitment.
"We're already working on initiatives - some that are embryonic and others which are out in the market - which can support how this can be achieved."
Dr Nation acknowledged the unique value of Dairy Australia to dairy farmers, providing an overview of the value of long-term investment in areas such as genetics and feedbase, the value of industry partnerships, and Dairy Australia's commitment to creating value to farmers.
He said DA helped resolve substantial industry issues.
"A recent example of this is artificial insemination, or AI, training," he said.
"This was a growing industry problem because of the expense and challenges of practical training.
"In response, Dairy Australia brought the key players together, including the herd improvement industry.
"We updated all of the training materials, were successful in obtaining government grants to support this, and built new delivery models with TAFE institutes across the country.
"We now have clear way forward to deliver AI training at scale and meet industry needs."
Two new directors elected to board
Two new directors were elected to the DA board during the meeting.
Andrew Maughan was selected for the finance and risk management vacancy and Professor Alan Bell for the research, development & commercialisation vacancy.
Mr Maughan grew up on a family farm near Tongala, in the Goulburn Valley, and has 24 years board experience across 12 companies, mostly in the food and agribusiness sector, including being a Gardiner Foundation director.
Professor Bell grew up on a dairy farm in South Gippsland and has substantial experience in managing a diverse portfolio of research and development and innovation programs, including 15 years of experience in leading large R&D organisations at Cornell University (USA) and CSIRO.
After the AGM, Mr Mann was reappointed chairman for a third year.
"I welcome Andrew Maughan and Professor Alan Bell to the Dairy Australia Board - they bring a background and skillset that will help us continue to achieve for farmers," Mr Mann said.
He also acknowledged Paul Wood and Josephine Rozman, who retired from the board this year.
"Paul's wisdom, contribution and passion to driving research outcomes over many years has been outstanding," he said.
"I am also grateful to Josephine's experience and expertise in the area of risk.
"A thank you must also go out to Russell Abotomey who has resigned from the Dairy Australia board and will depart in December of this year."
The results of the AGM, as well as a recording of the meeting, is available on Dairy Australia's website www.dairyaustralia.com.au/AGM.
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
