Queensland Dairyfarmers’ Organisation Limited ABN: 90 090 629 066
Submission to the
Green Paper on Developing Northern Australia
Introduction
The Queensland Dairyfarmers’ Organisation (QDO) welcomes the opportunity to provide comment to
the Green Paper on Developing Northern Australia.
Over the past decade there have been many reports and reviews about growing northern Australia.
The QDO takes a view that it is now time to implement the strategies recommended and the
information resources developed. Governments with responsibilities across the north now need to get
on with creating the environment for the development rather than talking about the opportunities.
The QDO is a member of the Queensland Farmers Federation (QFF). The QFF has made a
submission to the Green Paper which is supported by the QDO.
This Submission will concentrate on some dairy specific issues with regard to the development of
Northern Australia.
History of Dairy in Tropical Australia
The dairy industry has more than a century long proud history of producing milk and milk products
for the population of northern Australia.
Due to the harshness of the tropical climate and the need for high quality farming land to produce
improved pasture and grain and other crops, tropical dairy farming has concentrated on the Atherton
Tablelands and coastal strip of central Queensland.
From these dairy regions milk and dairy products have been supplied to satisfy the consumer needs
across the entire Northern Australia.
There have been attempts to carry on dairy farming in the Northern Territory with one dairy farm
operating near Darwin for a time. There have also been attempts to develop a lot feed dairy farming
operation at Katherine. Katherine provided the quality soils to produce pasture, hay, grain and other
crops but the harshness of the summers with high rainfall, temperatures and humidity have combined
to date to thwart the development of a viable dairy farming operation outside the Atherton Tablelands
and the central Queensland coastal strip.
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Green Paper Policy Directions
The Green Paper highlights a range of possible policy directions, including delivering economic
infrastructure; improving land use and access; improvement water access and management; promoting
trade and investment and strengthening the business environment; fostering education, research and
innovation; and enhancing governance.
All of these are important for the continuing contribution the dairy industry can make to the further
development of northern Australia. However, to expand the contribution of dairy beyond its capacity
to grow within its current footprint and its capacity to expand beyond its current footprint, there will
be a need to have:
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access to high quality soil types;
high security water for stock and irrigation, particularly during the dry season;
a strong business environment which attracts capital to develop additional milk processing
and dairy product manufacturing facilities; and
other essential support businesses for dairy farming operations, including veterinary and
animal health, agronomic, fertiliser suppliers, refrigeration, electrical, plumbing and
mechanical resources to name but a few.
All of these elements has to be met to develop a northern Australian dairy farming industry outside of
the current footprint.
Dairy Can Deliver as the North Grows
Due to Queensland’s more than a century involvement in dairy farming in a tropical environment,
there has been, and continues to be, a significant investment from both industry and government in
dairy production research and development and productivity skills in a tropical environment.
This production knowledge and skill base ensures that the dairy industry can prosper in Northern
Australia to supply growing markets as development of the north progresses. For example, the maize
varieties grown on the Atherton Tablelands were specifically developed for that environment and are
not grown anywhere else in Australia.
The maize growers on the Atherton Tablelands would not continue to operate without the dairy
farming industry being their major and ongoing customer. So growing and strengthening the Atherton
Tablelands and Central Queensland tropical dairy farming capabilities will not only contribute to
meeting demand for a growing north, but also increase the contribution dairy makes to local and
regional communities where the necessary support services for the industry already exist.
Similarly, the Queensland dairy industry, in partnership with Government, has applied significant
human and capital resources to address the unique natural resource management challenges which
present in a tropical and sub-tropical production environment compared to a temperate environment.
While dairy farming throughout the world is primarily a temperate agricultural industry, dairy farming
can be successfully undertaken in the harsh summer climatic conditions such as those in northern
Australia through shedding and other animal health and welfare technologies.
Where there are dairy industries operating in similar harsh climatic environments around the world,
they are primarily producing milk and milk products for the immediate local market rather than
producing primarily for export.
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Any foreseeable growth in demand from a growing northern Australia can be serviced by existing
dairy farming regions.
What is Required for Northern Dairy Farming Outside the Current Footprint
If, as the north further develops, there is demand to expand a northern dairy industry across the
Northern Territory and northern Western Australia there are a range of issues which will be essential
to meet to allow that development to occur.
Dairy farming will compete with the horticultural industries for access to high quality soils and high
security year round water availability, both of which are relatively scarce resources across the north.
Dairy farming will need the security of locally produced high quality silage, hay, grain and other
crops as the transport costs to bring these essential feed needs into a dairy farming operation in the
north will almost certainly be prohibitive against competition from southern produced milk and milk
product imports.
Dairy farming in the north will also have a critical need for high security all year round water
availability for essential animal needs, processing requirements and irrigation, particularly in the dry
season. Without the high security water availability during the dry season for animals as well as
pasture, grain and other crop production there will not be a significant industry develop outside of the
now operating tropical dairy production regions in Queensland.
Milk is a product which is highly perishable and must be processed before it can be sold to consumers
as either drinking milk or as a dairy product. Consequently, dairy farming needs an investment and
human resource operating environment where there is a willingness for capital to be applied to a high
technology dairy processing and production facility within relatively short distance of the farming
operations.
A dairy farming industry in the north outside the current operations will not develop without the
essential support services for the farming operations such as veterinary and animal health, agronomy,
fertiliser supplies, refrigeration, electrical, plumbing and mechanical. Just as importantly, milk
processing and dairy product manufacturing capability and the support services they need are essential
ingredients in a new dairy farming industry starting in northern Australia.
National Retail Pricing Strategies
There is one other significant competitive issue which will mitigate against the development of a dairy
farming and milk processing industry outside of the current foot print and that is the retail pricing
strategies for fluid milk of the major supermarket chains. The largest selling brands for fluid milk in
Australia are supermarket home brands and their share of the market continues to grow as the national
retail pricing strategy is for the same one low retail price of $1 per litre of milk.
Due to the technology required and the production system needed for a dairy farming industry to
succeed in a harsh tropical environment, the costs of production for milk will always be greater than
the production costs of the more temperate regions of Australia and the world. A national retail
pricing strategy of $1 per litre will mean fluid milk will continue to be a loss leader product on the
shelves of Northern Australian supermarkets if it continues to be priced at the same point as in
southern Australia.
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