Look to Orient, industry urged

The WA dairy industry needs to broaden its focus to the Asian market and reduce its reliance on the two major supermarket chains in order to grow, according to speakers at this year's annual WAFarmers dairy section conference.

WA Agriculture Minister Terry Redman officially opened the event, held on July 26 at Abbey Beach Resort in Busselton, by speaking about the potential of the sector.

"Although we have seen a decline in the size of the dairy herd and the amount of dairy farmers, the reality is WA has the capacity to produce a lot more milk," he said.

"If we limit our vision to supplying Coles and Woolworths we are still operating in a very narrow field.

"We need to look beyond the domestic market and seize the opportunities that await us further afield."

Mr Redman said WA was well placed to capitalise on the food security needs of Asian countries.

Recently appointed Dairy Australia group manager of trade and industry strategy Charlie McElhone spoke about the policies surrounding the dairy sector.

"The industry nationally is at a crossroads in terms of policy development," he said.

"It is a misconception that farmers' issues end at the farmgate. We need to look at the whole supply chain and the industry is only as strong as its weakest link."

Mr McElhone said Dairy Australia was assessing policies across all areas of the sector, to identify parts of the supply chain that could be improved.

He said the drive for differentiation in the marketplace, as seen in recent developments with permeate-free milk, highlighted the need for producers to keep up-to-date with profit opportunities.

He said trade policies played a key role in spreading the risk involved with WA's market access.

"Market diversity is an important risk mitigation factor and WA needs to look at ways to expand," he said.

"There are more than 400 free trade agreements in the marketplace and for every one of those that we are not a part of we are at a disadvantage.

"We need to keep our eyes on opportunities where policy developments can free up our trade."

Australian Dairy Farmers president Chris Griffin discussed the role WA dairy producers could play in future global food security.

"According to the United Nations, demand for food will increase by 70 per cent by 2050," he said.

"The question is, will such an increase in world demand for food present opportunities for WA dairy farmers?

"I believe it will, but only if we are ready."

Mr Griffin said WA needed to find ways to increase its market share and be "demand ready".

He said investment in research and development would play an important role in the industry's future.

"We need to hunger for innovation in genetics, technology, pastures and production systems," he said.

Jay Horton, of Strategis Partners, addressed the conference about the Fresh Opportunities report into building a sustainable dairy industry in WA.

The report, published earlier this year, outlined the challenges and opportunities facing the sector.

Mr Horton said the WA dairy industry needed to expand in order to overcome its vulnerability in the marketplace.

He said WA had an advantage over eastern states dairy producers in their proximity to Asia.

"WA can stand out on a fresh value approach in a premium market into Asia," he said.

The report outlined a 10-year plan to improving the prospects for WA dairy farmers, which included greater collaboration between government and industry and within the dairy sector itself.

Rengineering the supply chain, expanding farm businesses and working with Asian export partners were cited as goals to help the industry grow.