Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

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The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Joel Robinson

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens, rooftop open space and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Ceerose, founded by Edward Doueihi in 1998, has become one of Sydney's more active apartment developers, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.

Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.

Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.

[smartcode_project:default project_id=112195 project_image_fid=372638]

The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;

Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.

Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.

"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.

"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."

The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.

[smartcode_project_cta:default project_id=112195]

Spacious Group completes Voyage Altona in Altona's beachside precinct

Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.

Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.

The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.

<a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.

The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.

<img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" />

Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.

"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.

The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.

The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.

Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.

Bakir said the project had been designed to respond to that shift in buyer expectations.

"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.

Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.

Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.

Early site works are underway, with construction expected to commence later this year.

Homecorp approved for Budds Beach apartment tower, Lýon Residences

New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

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North-facing Swan River views drive demand at Rivière Residences in Applecross

Dairy Farm

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The rural property market in south west Victoria and south east South Australia has now hit its straps according to analyst firm Herron Todd White who say the past 12 months has seen a significant increase in demand from both graziers and cropping operators following a good 2016 season.
According to HTW 2016 experienced high crop yields and good pasture growth across most areas which has resulted in a large number of transactions at increasing value levels.
"The continued, although lower stock prices have provided confidence for graziers and cropping operators to search for economies of scale but have the makings of a good season in 2017 as they sow their crops," HTW said.
"Supply of good quality property stock remains tight and many properties are changing hands prior to hitting the market.
"The short supply in most areas is resulting in rapidly increasing land values in some regions especially around areas such as the Wimmera and Lake Bolac. 
"Corporate activity continues following the 2016 sales of Banongil, Mount Fyans, Coonawarra Fresh Produce, Camperdown Dairies and Kaladbro Station to name a few.
"The above sales totalling more than $130 million in transactions which has not been seen since the boom of the timber industry through the early 2000s. We expect that this corporate activity will continue over the next 12 months.
"Cool climate wine grapes in the Coonawarra, Great Western and Pyrenees are starting to display resurgence with improving market confidence and a small number of transactions occurring including the sale of Rymill’s Winery in late 2016 to a Chinese investor.
"A steady increase in demand and pricing of cool climate vineyards is expected in the medium term.
"Dairy activity remains subdued following the 2016 milk price cuts and farmers have concentrated on cost cutting, although a sign of relief was experienced following Fonterra’s recent announcement of a forecast $6.00/kgMS farm gate milk price.
"This market is likely to remain subdued for the short term as market demand and supply fundamentals remain unchanged."
A 535 acre dairy farm in <a href="https://www.realestate.com.au/property-dairy-vic-simpson-7897426" target="_blank">Simpson, Victoria</a> (above), is on the market for $3.2 million. The property features 3 titles and 2 good quality 4 bedroom homes.
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jonathanchancellor-7SQnKwU6yx

Demand soars for rural property in southern Australia: HTW 

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Farmers are holding onto dairy farms in the south west region of Victoria until a stronger situation in the dairy farm industry according to Herron Todd White's rural report for November.
HTW said although confidence has been shaken, there is presently an element of optimism for the future and dairy farmers are adapting to different management processes.
"In mid 2016 there was much well publicised negative press coverage in regard to the dairy farming industry, highlighted by Murray Goulburn’s sudden back dated drop in farm gate milk prices paid to farmers, with income to farmers less than cost of production (below break even point)," the report said.
"Added to this were higher than usual feed costs incurred by farmers due to the drier than usual seasonal conditions sustained since 2013.
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"Despite the mood in the dairy farm industry, there has not been a flood of farms on to the market from dairy farmers anxious to relinquish dairying and it is anticipated this will continue until farmers are in a stronger nancial situation. 
"There is now a significant focus on cost control with the business strategy being reviewed to reduce debt and rebuild equity rather than chasing profit margin. On farm adjustments are being made to downgrade off farm feed requirements, increase rate of culling of less productive stock and repairs and maintenance treated only on an essential need basis.
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"There is presently limited enquiry from the corporate and foreign sector for the purchase of dairy farms and the availability of suitable farms to consider is equally limited. Unless the farm satisifies an absolutely thorough due diligence and the prospect of longer term capital growth is encouraging, it will not be purchased. 
"The recent sale at auction (September 2016) of a 182 hectare, average dairy farm located just outside Timboon township which sold for $12,355 per hectare, purchased by a neighbour points to an approximate 10 percent to 15 percent drop in value from the peak of the market pre GFC. "
Property Observer found a dairy farm currently on the market in Timboon with approximately 165.00ha. 
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The property, <a href="https://www.realcommercial.com.au/property-commercial+farming-vic-timboon-501915754" target="_blank">115 Church and Trotters Road, Timboon</a>, has irrigation, a freestall barn with a capacity of approximately 1,000 cows, 50 unit rotary design dairy and modern, four bedroom residence completed in 2008.
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Victorian dairy farmers weathering rural market

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A commercial dairy farm and cafe in Victoria's South Gippsland region is on the market by expressions of interest through Shane McIntyre of Colliers International and Tom Gibson of Alex Scott &amp; Staff.
Caldermeade Farm &amp; Café, is a 450-cow, <a href="https://www.realcommercial.com.au/property-commercial+farming-vic-caldermeade-502140934" target="_blank">182.45-hectare (451-acre) commercial dairy</a> featuring a fully licensed café, 50-unit modern dairy with 50ha of centre-pivot irrigation and an abundance of secure irrigation water.
The farm has milked 350 and 400 cows at once and can produce between 7,500 and 8,000 litres per cow per annum. There are currently 365 Holstein cows milking.
Mr McIntyre said extensive frontage to the South Gippsland Highway was not only a significant asset to the tourism side of the property, it also made the property an attractive proposition for long-term land banking.
"More than 12,000 vehicles pass by the property every day on the way to Phillip Island, a destination attracting more than 3.5 million visitors annually," he said.
Two nearby properties have been secured on five and three-year leaseholds in the past nine months 
Expressions of interest close November 30.
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Caldermeade dairy farm and cafe enterprise hits the market

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GUEST OBSERVER
A fall in the farm gate price of milk and the pain felt by dairy farmers as a result, has many pointing the finger at supermarkets for discounting the price in the so-called “milk wars.” However the suggested solution of raising the price we pay for milk to pass on more profit to farmers is misguided.
Supermarkets have been driving down the cost of basic goods like milk since 2011. But the actual underlying culprit for the fall in prices has been the global glut of supply relative to demand driving down the world price, with only a partial offset from the decline in the Australian exchange rate.
Others have advocated for a return to the regulation of the 20th century with a domestic price set at a premium, or retailers selling branded milk at a premium and returning a share to dairy farmers. In reality, the likely income gain from increasing prices for domestic milk sales would be small.
Australia’s current industry policy is to let market forces set prices, investment and employment across different sectors and industries, rather than government “picking winners” and subsidising selected industries. Setting prices for the dairy industry, would be a return to the “bad old days” with a risk of a decrease in farm productivity.
<h2>Market Context</h2>
About 25% of farm milk production goes to fresh milk sales for domestic consumption. In turn, about a half goes to supermarkets where the store brands, sold for a dollar a litre, account for a bit over half of all supermarket sales. Some branded milk sells for nearly double the store brand milk.
If more people switched to buy a more expensive brand of milk, how many would it take to make enough returns to save dairy farmers? At the moment the maximum amount of milk sold for a dollar a litre would represent about 8% of current farm production.
The remaining 75% of farm milk is used to manufacture a range of products, including butter, cheese, skim milk powder and whole milk powder. Roughly half of the butter and cheese is exported, and 70% of the milk powder. Australia imports cheese as well as exports. The Australian dairy industry depends on the world market for much of its production.
Another aspect that determines the returns for dairy farmers is the world price for manufactured dairy products, adjusted for movements in the Australian exchange rate. If supermarkets raised the farm gate price of milk above that which other countries pay for milk products, processors would switch from manufacturing these products to processing milk instead.
By the same argument, if some retailers are paying farmers above the export parity price, competitors will bid milk away from exporters and undercut the high payers to drive prices back to export parity. That is, the export price provides both a floor and a ceiling to the price which supermarkets can negotiate.
Australian dairy product exports represent a small share of world trade of dairy products, and a very much smaller share of world production. While it would be an oversimplification to say Australia doesn’t have a stake in setting the global dairy price, a 10% or 20% increase in Australian exports would require a very small export price reduction.
<h2>A return to ‘the bad old days’</h2>
Set prices for dairy products, and other agricultural products, were phased out as a part of economic reform in the 1980s and 1990s for a more productive economy and the reasons for this remain valid today.
Setting a price for domestic sales, in this case milk, above the export price leads to a battle between different parties and lobby groups as to what price to set, it may also influence consumers' decisions as to what they buy and arguably some more than others. It could also shift more resources on farms into the dairy industry, chasing a higher price and away from other types of production (which are set by a global price) such as meat or horticulture.
For those dairy farm households facing poverty as a consequence of the slump in world prices, it is more direct and effective to provide direct household support than to artificially increase the product price for all dairy farmers.
John Freebairn is professor, Department of Economics, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/john-freebairn-90" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Higher supermarket prices for milk won’t necessarily help farmers

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The Australian government’s intervention in the dairy crisis by offering concessional loans to struggling farmers has prompted suggestions that other types of regulation - such as a dairy floor price - might be needed.
The dairy industry was deregulated more than a decade ago; perhaps it’s time Australia looked to other countries for models to fix the system.
The current situation facing the Australian dairy industry is the same the world over. The European Union and the United States come to mind, as milk supply outweighs demand. But they provide assistance to their dairy farmers through subsidies or other support that helps to keep them viable.
Canada does not compete internationally in the dairy sector as it maintains a supply management system introduced in the early 1970s. Dairy is not subsidised, as government provides no support, and the price paid to farmers is negotiated among stakeholders.
When I explained this Canadian supply management model to Victoria dairy farmers, as part of my research earlier this year, they rejected the idea. However the current situation may cause some of them to reconsider this position.
While the Canadian model works for Canadian farmers, a supply managed system would be more difficult for those in Australia given that about 40% of Victorian dairy is exported and exports don’t happen with supply management. But Australia’s share of the global market is decreasing over time, despite the best efforts of Australian dairy organisations and farmers, and the number of farms continues to decline. Perhaps Australia will end up with a system resembling a supply managed one through market mechanisms.
I interviewed a total of 45 farmers and dairy stakeholders in Australia during February and March of this year, nearly half in Queensland and the remainder in Victoria and Tasmania. I was interested in how the Australian dairy model works, especially as it is cited by the business press in Canada as one that we should adopt given their dislike of Canada’s regulated system.
What is the supply management model? Briefly, it matches domestic demand with domestic supply and exports are non-existent. The system is based on quotas - for example a kilogram of milk solid costs C$25,000 in the province of Ontario where I live, and it represents about one cow’s worth of production. Producers need at least 50kg of milk solids to run a decently remunerative operation.
Stakeholders representing producers, consumers, processors, the restaurant association and others meet annually to determine price, not government. Included in this is a profit guarantee for farmers that allows them to make long-term decisions and maintain a middle class lifestyle while milking on average about 70 cows. It also means they are immune to this latest global crisis, and to future ones.
And if supermarkets decide to use milk as a loss leader, it is the deep-pocketed supermarket that takes the hit, not the farmer. The price paid to the latter is guaranteed by negotiation, which creates stability.
Clearly, this is not how it operates in Australia where the supermarkets, according to one Queensland dairy producer, “must bruise the farmers to give them a loss leader.” Nor is the price consumers pay for milk in Ontario out of line with that charged by Coles and Woolworths, the real regulators of Australian dairy. Southern Ontarians pay the equivalent of the infamous A$1.00 per litre – A$4.00 for Canada’s four litre container, and have done so for years.
I found in my research that Victoria’s dairy farmers are in favour of privatisation and deregulation. They talked a lot about efficiency and how they are among the world’s more efficient farmers, and Canadians must surely not be, given their system.
Perhaps this is true if efficiency is measured by getting the greatest amount of milk for the least input. But Australian dairy farmers fall behind by other parameters.
Ontario dairy farmers, for example, employ robotic technology at a much greater rate than their Victorian counterparts. New dairy barns are being put up all over the province and a majority of them install robots to do their milking. Ontario now has hundreds of farms using milking robots.
The situation in Victoria could well come to that of New Zealand’s, where cows may be culled and the survivor’s rations severely cut back, as farmers are unable to feed supplements in such an adverse economic climate.
In an interview, as part of my research, one New Zealand dairy farmer told me he was into “starvation mode” for his cows because of cost. He was feeding them with grass only and when that ran out, there was nothing else. He was certainly running an efficient farm, but at a significant cost to his own mental health and to that of his cows’ wellbeing and ability to provide milk.
One Victorian farmer told me that even before the announcement of cuts to the milk solids price, he and his colleagues “farmed at the margins". When prices are robust, so are farmer’s livelihoods, but when they collapse, as they always do in a commodity situation, so do their livelihoods.
This results in another vicious cycle of dairy farmers quitting the industry which leads to further instability. As another interviewee told me, following the cut:
“We will wait and see and hang on for dear life.”
Might the future of Victorian dairy be Queensland, where farmers suffered much of what their Victoria counterparts are now experiencing more than a decade ago after deregulation, and dairy is now a niche industry?
As one Queensland interviewee emphatically instructed me about Canada’s model:
“Don’t give away [the] regulated system!”
Now is the time for Victoria to consider the advice of this farmer and introduce more regulation.
Bruce Muirhead is professor of History and the associate vice president, External Research , University of Waterloo and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/bruce-muirhead-269512" target="_blank">here</a>.
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Time to get regulation back into Australian dairy?

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Agriculture Minister Barnaby Joyce has announced a package of concessional loans and facilitation of access to assistance for the beleaguered dairy industry.
The government will make available immediately A$55 million in concessional loans for Murray Goulburn and Fonterra suppliers, and access to $500 million of such loans over 2016-17 and 2017-18. These recovery loans will be for terms of ten years.
They will be funded by expanding the drought concessional loan scheme to include criteria that are specific to the dairy industry.
Dairy farmers have been squeezed as milk processors Murray Goulburn and Fonterra cut prices after they over-estimated returns from exports. Farmers have been faced with having to pay back advances that had already been given to them.
There has been considerable public support for their plight, with some consumers favouring the higher-priced brands of milk rather than the cheaper home brand in supermarkets.
The government has resisted calls for a levy on milk.
The government says opposition agriculture spokesman Joel Fitzgibbon was consulted in the development of the package under the convention of the “caretaker” period. But Fitzgibbon rejected this. “A vague letter last Friday might be Barnaby Joyce’s idea of consultation, but it is not mine,” he said.
The package includes a number of other measures, focused especially on helping farmers get access quickly to assistance.
There will be $900,000 for an extra nine rural financial counsellors in Victoria, Tasmania, South Australia and New South Wales, and $900,000 to Dairy Australia to continue rolling out one-on-one business advisory support under the Tactics for Tight Times programs.
Applications for the Farm Household Allowance will be fast-tracked, with a decision made almost immediately in cases of real hardship when the necessary information is available. Case officers will be available to talk with the farmer’s accountant or financial adviser to speed up obtaining the information.
One-stop-shop mobile service centres are now travelling through dairy areas of Victoria and South Australia to give direct access to a full range of government services.
A Dairy Industry Liaison Officer will be appointed to work on the ground with farmers and communities to co-ordinate support and services.
Joyce said that in a sign of “strong confidence in the industry’s future”, a re-elected Coalition government would commit $20 million to build the upgrade of the Macalister Irrigation System in Gippsland. This would upgrade the 1920s and 1950s era Southern-Tinamba area irrigation network, delivering almost ten gigalitres in water savings that could be put back into growing the region’s agricultural production, he said.
The Coalition would also work with the industry to establish a commodity milk price index, to help ensure the domestic industry did not in future find itself in a situation where processors unexpectedly reduced farm gate milk prices late in the season.
“The index would introduce greater transparency and market signals in domestic and global milk prices. The Coalition will consult with the industry on the design of the index that would provide dairy farmers with valuable information for use in supply negotiations with processors and to assist in following international price trends,” Joyce said.
Fitzgibbon said he supported everything that was in the package but it was not enough. It fell well short of farmers' expectations and they would be “bitterly disappointed”.
He said the key issue was delivering a cash flow improvement but the package “does very little for cash flow” and so would be of little assistance.
Michelle Grattan is professorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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Dairy farmers get $555 million in concessional loans

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ANZ has today activated an assistance package for its Australian dairy farmers impacted by a mid-season milk price reduction.
ANZ General Manager Regional Business Banking Christine Linden said falling farm-gate dairy prices are putting significant stress on some dairy producers and while the macro fundamentals in the medium and longer-term of the industry remain strong, we know many of our customers are doing it tough at the moment.
“We’re encouraging our dairy customers to get in touch with us so we can provide support and work with them on the best possible solutions to meet their needs," she said.
“Every farm has a different cost structure and unique characteristics. We’re committed to working with each customer to respond to the current challenges so they can take advantage of the long-term benefits of the dairy industry.
As part of its assistance package, ANZ offers to:
Suspend repayments on loans, including credit cards, for up to three months (which may include interest capitalisation)
Waive fees associated with restructuring business loans considered necessary due to milk price impacts
Provide temporary adjustments to lending limits, including credit cards to assist with unexpected costs and reduced income
Provide early access to term deposits without incurring any fees for impacted customers
Provide access to hardship support services.
ANZ’s customers affected across Australia are encouraged to visit their local branch or contact their Agribusiness Manager to discuss the impact on their business or personal circumstances.
Customers can also contact ANZ’s dedicated financial hardship team on 1800 351 548.
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ANZ assists dairy farmers with milk price reduction package

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVERS
A structural change is underway in global dairy markets. A perfect storm has emerged through a coincidence of events, technology, and policy changes across the major dairy producing nations, including Australia, which will result in a long term significant reset of dairy economics across the globe.
Cooperatives Murray Goulburn and Fonterra have both dramatically reduced the prices they offer dairy farmers for milk, sparking a backlash from farmers, who say they will be pushed into the red and out of dairy.
It is only due to the strength of the two cooperatives in absorbing the costs of high milk prices in a changing market that these reductions did not occur earlier. The cooperatives have shown an inadequate understanding of global dairy economics by over-paying farmers and by seeking to claw back over-paid advances.
The low prices have been blamed on a short-term oversupply coinciding with a reduction in demand from China and Russia. Some of this demand is now being met by Chinese investment in both Australia and New Zealand which also contributes to the changes underway. But the debate thus far has focused on problems with demand while ignoring the bigger issue of increasing global over-supply.
The preoccupation with the belief that global demand will solve emerging on-farm production cost difficulties and that a “substantial improvement in prices was still expected by mid-2016” was naïve and failed to recognise how quickly, and irreversibly global dairy supply can change.
Since the mid-2000s a strong increase in demand for milk products across Asia, largely on the back of rising middle-income wealth led to the complete depletion of surplus dairy stocks in the European Union and the US. This change to the supply-demand equilibrium resulted in a temporary sea-change in dairy markets because growth in demand simply outpaced growth in supply by between 50% and 100% in some markets on an annual basis.
To a large extent this imbalance had been driven by regulation of the global supply market in which only a few export nations competed – Australia and New Zealand included. It resulted in higher than historical average dairy prices in global markets, but considerably more short-term volatility due to global GDP shocks and short-term supply-demand imbalances.
Regrettably a critical assumption that appears to have emerged among producers during this period, as evidenced by continued investment and expansion, was that the real price for global dairy commodities was increasing, a trend they expected to continue in the long term.
The current dairy price scenario, which would historically have been short-lived, is in fact masking underlying structural changes to supply-side dynamics that are now underway. Only approximately 7 percent of globally produced milk is traded (65 billion milk-equivalent litres). Therefore, a small change in supply globally has a profound effect on the global dairy market equilibrium.
The EU is the world’s largest milk producer, with approximately 160 billion litres produced annually. The <a href="https://www.fao.org/docrep/012/i1522e/i1522e02.pdf">r</a>emoval of milk production quotas in March 2015 presented an opportunity for dairy expansion and, even more importantly, one that is no longer confined to the traditional dairy exporters of Ireland, France, Belgium, and the Netherlands.
Under quota, EU exports doubled between 2000 and 2013 to 9.5 billion litres and are anticipated to increase again this coming season. Quota removal has freed dairy farmers in central and Eastern Europe to increase in scale considerably, availing themselves of technologies denied during the Cold War years. Coupled with the removal of regulations concerning the transportation of liquid milk across borders, producers and processors now find themselves with opportunities for growth not experienced since the second world war.
Political policies in the world’s third largest dairy producer, the USA, are also likely to influence global dairy supply in the future. Current dairy production is being stimulated by low feed prices, which were driven by record yield seasons in 2013 and 2014, similar levels in 2015 and new projected highs this year.
Eighty percent of US dairy farm costs are feed. The reduction in feed costs from US$29.26 per 100kg milk in August 2012 to US$18.04 per 100 kg milk in June 2015 has greatly increased the value of marginal production.
The advent of large-scale fracking, which has resulted in a significant reduction in the price of oil, will likely maintain lower corn prices, at least in the short-term. This comes as the reduced value of biofuels re-focus the use of corn back to a feedstuffs for farmed livestock. The net result is that 75% of every new tonne of production across the USA is expected to be sold on the global surplus market.
Farmers have fought for free trade and open access for decades on both sides of the Tasman. Now that it is emerging, profitable returns will be caught first by the lowest cost global producer.
We are fools to think that that will be either Australia or New Zealand. Therefore, possibly with the exception of the US market, a downward reset is in store for global dairy prices.
James Lockhart is senior Lecturer, School of Management, Massey University and can be contacted <a href="https://theconversation.com/profiles/james-lockhart-265538" target="_blank">here</a>.
Danny Donaghy is professor of Dairy Production Systems, Massey University and can be contacted <a href="https://theconversation.com/profiles/danny-donaghy-265818" target="_blank">here</a>.
Hamish Gow is professor of Agribusiness, Massey University and can be contacted <a href="https://theconversation.com/profiles/hamish-gow-265539" target="_blank">here</a>.
All are authors for The Conversation.
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