CONTENTS

Executive Summary

The purpose of this Agricultural Development Partnership (ADP) program was to drive competitive and sustainable dairy development in the South East and Murraylands regions of South Australia through four key strategies:

Ensuring a sustainable resource base

Consolidating a viable production sector

Attracting industry investment
 
Ensuring a diverse product mix

Over the past two years the ADP project has successfully laid the foundations for long-term development of the industry in South Australia.  All of the outcomes in the partnership agreement have been achieved and a number of tools and support systems have been implemented to underpin future planned growth in the industry.

The improved industry environment with higher farm gate prices, favourable seasonal conditions and rising farmers confidence has established a sound platform to achieve the growth potential detailed in the State Dairy Plan.  This plan was reviewed and updated by the Dairy Industry Development Board (DIDB) as part of the ADP program to ensure that the industry targets remain clear, realistic and achievable.  The updated plan was relaunched with industry and the two regional communities in September 2005 under the ADP banner.

The key objectives of the plan are to

Grow the South Australian dairy industry by 2013 to 1.2 billion litres of milk annually, while achieeving the highest added value per litre of milk in the Australasian region

A summary of each of the achievements under each of the four strategies follows.

Ensuring a Sustainable Resource Base

Ensuring a sustainable resource base addressed the critical resources required for industry growth. The critical resources have been identified as land, water, infrastructure, environment, research and people.  Achievements and outcomes of this strategy include:

• Development of a series of GIS maps and reports on what resources are available and what the requirements will be as cow numbers and milk production increases.  This information has been communicated to the South East and Murraylands regions via presentation to councils, regional development boards, farmer groups and industry bodies.  The GIS maps highlight the potential growth areas for dairy across the state.  They have become an essential tool in industry planning and have been utilised in a variety of ways.  For example they have been used for planning for ETSA to supply required three phase power to dairy regions, in planning for road transport development to ensure double articulated vehicle access to dairy farms for milk pick up and in identifying new regions that have not previously been dairy regions, resulting in a scoping study of the Southern Mallee region to investigate the potential for dairy development.  They are also used regularly to provide an overview of the most suitable land for dairy development for potential new investors.

• The ADP project addressed the environmental issues by managing the development of new effluent guidelines for the South East.  Effluent has been identified as an important factor in environmental management of dairy farms.  This has been a major achievement of the industry working together with Government and the community to produce a positive outcome.  As part of the project all farmers in the South East received the new effluent guidelines and over 90 farmers have received technical advise about the implementation of the guidelines on their farm.  The success of this project has resulted in further funding being acquired to implement new effluent guidelines across the whole of the state.  
  
• Nutrient balance was assessed to be another important area for environmental management on dairy farms.  A nutrient discussion paper has been written to provide information on nutrient movement, balance and management.  The paper discusses the potential impact of increased cow numbers on natural resources and how to allow growth while minimising the impact on the environment. A fact sheet summarising nutrient balance on farm was sent to all SA dairy farmers to raise awareness and increase understanding of the issues of nutrient balance. 
  
• A consultative committee representing the industry developed the dairy innovation plan.  It identifies the research, development and extension that will be required to service the industry over the next 8 to 10 years through looking at the barriers to industry expansion and achievement of the State Plan targets.  These barriers or ‘rate limiters’, as they are referred to by Minister Rory McEwen, represent the areas that industry needs to concentrate its resources into.  This document has been utilised to highlight the rate limiters to the Minister and will be used to determine the suitability of dairy projects for funding by the State Government through out Primary Industries SA (PIRSA), SA Research and Development Institute (SARDI), Food SA, Commercial projects and the Dairy Industry Development Board  
  
• The program identified that industry and regional communities will need to build their capacities and capabilities to meet the changes resulting from dairy industry growth.  A training needs analysis was completed to determine the priority areas requiring development.  It was identified that the industry required a coordinated approach to training across the State and this has lead to the development of a proposal to build a partnership between the SA dairy industry (driven by ADP project, Dairy SA and South Australian Dairy Association), TafeSA and the National Centre for Dairy Education Australia.  Discussions are currently underway to finalise this exciting new way forward for training in the SA dairy industry.  To start the ball rolling the ADP project has been providing a coordination role for training across the whole of the State, developing a training course registry on the website and facilitating and promoting courses and training available to dairy farmers.  
  
• The ADP project has provided support for the ‘Irrigated pasture systems comparative project’, promoting best practice irrigated pasture management and developed the ‘Irrigation for Profit’ workshops, a training package for best practise irrigation management.  It has also supported training in succession planning, development of Human Resource Tools and training in farm economic performance analysis. 

Consolidating a viable production sector

The second strategy is about developing a viable production sector.  A significant proportion of the growth of the industry will come from the expansion of existing farms, for this to occur the industry needs to have a viable and sustainable production sector.  The achievements of this strategy include:

• One of the key drivers of profit identified on South Australian dairy farms is pasture production and management.  It was decided by the ADP Steering Committee to invest with DairySA in a State wide pasture program that aims to increase pasture utilisation on farm.  The project ‘Focus on Forage’ has provided best practise information to dairy farmers on pasture production and home grown fodder to maximise their profitability.  Over 80 farmers have participated in the program, on 8 farms using 4 different consultants.  The results have show both increases in pasture grown and harvested on the host farms and significant implementation of skills and knowledge learnt by participants on their own farms.  The success of this project has lead to two further pasture production and management projects to be rolled out through Dairy SA across the state.
  
• The farm economic analysis project has also been implemented by the ADP project as a way to assess the viability of South Australian dairy farms and understand where improvements in performance need to come from.  This project has involved the collection of over 40 sets of farm financial data from volunteers throughout South Australia.  The data has been processed by ‘Red Sky’ and benchmarks have been produced for both average farm performance and top 15 of farms.   This benchmark data is being used individually by farmers to determine their farm performance and collectively to assess the present position of the South Australian dairy industry and the competitiveness of South Australia compared to other states and New Zealand.  The results of the performance analysis are being utilised for promoting the strengths of investing in the SA dairy industry.  The outcomes of this project have been considered to be critical to improving farm viability in the State and as a result Primary Industries and Resources SA have committed to providing funding for a further 2 years of data collection to improve the validity of the data.

Attracting industry investment

The third strategy is attracting farm investment into South Australia.  The ADP project has been working closely with the Limestone Coast and Murraylands regional development board’s to attract investment into the regions.  The project has developed the tools necessary to showcase to potential new investors the opportunities that exist in SA. The achievements in this strategy include:

• One of the key tools is the development of ‘one stop shop’ website.  This has been an exciting achievement for the ADP project and has been widely supported by the dairy industry, with many industry partners contributing, sponsoring and being actively involved in the site.   The site is a collation of information that has been designed so that it is useful for both existing dairy farmers and potential new investors.  The information ranges from a state dairy diary, weekly news flash, daily weather and daily feed grain prices, technical information, human resource information and useful contacts right through to SA statistics, new potential dairying areas, land, water and infrastructure maps of SA, dairy education and careers, council and EPA requirements and processor information.  The site has also been used as a vehicle for the extension of work completed by the ADP project and many other of the projects underway in the South Australian Dairy Industry.  The site will continue to evolve and develop as a very useful tool for the South Australian dairy industry.  It will operate after the ADP project completion through the regional development boards, PIRSA and the sponsoring industry groups.
  
• Other tools developed include guidelines for dairy development in SA, maps that show potential hot spots for new investment, council checklists, statistics and details about production and processing in SA, resource and infrastructure information required for new investors and investor information packages.  New investors are also assisted through the ADP project in setting up meetings, farm visits and tours of the region as well as a one on one service to answer specific development or dairy related questions.  This process has been very successful with an additional 5000 cows estimated to be invested through new farming enterprises over the next 12 months.

Ensuring a diverse product mix

The final strategy is about diversifying and securing a market product mix that contributes to a high added value per litre of milk.  This strategy has involved working closely with existing SA milk processors to build relationships and communicate the States plan for growth to help facilitate on going growth and development of their businesses.  Achievements of this strategy include:

• The project helped investors like Kraft, Warrnambool Cheese and Butter and the Limestone Coast cheese company and has also assisted potential investors like Numico, Nordmilch, Yosica and Meningie Milk Products.  It has also played an important role in publicity and promotion of the industry including supporting new industry initiatives like Cheesefest 2006, building relations with potential Chinese investors and working closely with the Dairy CRC.

The ADP project is continuing on through State funding for a further 12 months.  This is an exciting opportunity to utilise the many tools and outcomes achieved in the strategies outlined above for industry development over this period.  The emphasis will be on attracting farm investment with the help of the regional development boards, as this is the key to driving increased production in the State.  We are confident that increased processing capacity will follow if we can boost the state’s milk production.  The ADP project is proud of its achievements to date and believe that not only have we significantly increased the profile of the State Dairy plan but we have managed to get the whole of industry driving towards the goal of industry growth and expansion, ensuring a bright future for all of the South Australian dairy industry.