The dairy industry is also a major export earner, with more than half its production being exported to customers and consumers across more than 120 world markets.
These include markets for both the traditional dairy products (eg cheese, butter, yoghurt), ingredients (eg milk powders, milk protein concentrates) and highly specific components (eg colostrum for athletes, probiotic foods).
Following is a brief overview of the dairy industry’s approach to supply chain management – it is not a comprehensive description. The dairy industry is a vertically integrated industry with both parts of the supply chain (farm and manufacture) dependent on each other to ensure safe food. The farm sector is highlighted here, as the dairy industry’s supply chain activities in this area are less well known.
Safe food production
The dairy industry has progressed a long way since the days of end point product testing. Dairy companies introduced Hazard Analysis Critical Control Point (HACCP) systems at the factory level many years ago.
HACCP in its simplest form is a risk-based approach to managing food safety. It was therefore a natural progression, when assessing risk, to consider on farm (input) risks.
This led to all dairy companies requiring their dairy farmer suppliers to implement on farm HACCP based Quality Assurance Programs. Dairy companies were also responding to commercial drivers - their customers were seeking assurances about the safety of the products they were buying.
In implementing on farm QA programs, the dairy industry sought to integrate the management of food safety risks across the whole supply chain. This approach is now being adopted internationally by Codex (Code of Hygienic Practice for Milk and Milk Products) and the EU; nationally by Food Standards Australia New Zealand (FSANZ – Primary Production and Processing Standards) and State wide through the Dairy Food Safety Authorities (eg Dairy Food Safety Victoria’s Code of Practice). Key elements to this approach are:
· consideration of the food chain in its entirety for food safety purposes
· a science based assessment of the risk at critical points in the food chain and the development of appropriate strategies to manage the risk to protect public health and safety with minimum but effective regulation
· an emphasis on preventative rather than reactive measures
· recognition of the shared responsibility for food safety between all parts of the food supply chain
In the dairy industry, as a minimum, all on farm QA programs cover the same essential elements. These elements were agreed by industry several years ago and now form the basis of food safety programs. With the recognition by regulatory agencies of the need for a whole chain approach to food safety and a better understanding of where in the dairy chain the dairy food safety risks occur, there is now a mandatory requirement for on farm food safety programs in most States (all except WA).
The dairy industry has also asked FSANZ to develop the Dairy Primary Production and Processing Standard as a matter of priority - not because of concerns that food safety risks are not being addressed, but more from a trade risk approach. While most States have State legislative requirements for on farm food safety programs, and the dairy regulatory authorities have agreed to ensure consistent implementation, there is no national legislative framework for a whole chain approach to dairy food safety.
Increasingly, overseas customers are seeking assurances about food safety and it would be beneficial to have a national legislative framework to underpin the export regulations, rather than depending solely on State based legislation.
All on farm dairy food safety programs are HCCAP based and cover the following core areas: physical contaminants, chemical contaminants, microbiological contaminants, dairy milking premises, hygienic milking, water supply and quality, cleaning and sanitising, traceability and records, and personnel competency.
Verification of the systems is also an important element.
The State Dairy Food Safety Authorities licence farm businesses and these licences allow the farms to operate. Contingent upon the licence is the mandatory requirement in most States for dairy farmers to have and implement an approved, accredited food safety program.
The State Dairy Food Safety Authorities approve and accredit these on farm food safety programs. The implementation of the systems must be verified by audits undertaken by auditors approved by the State Authorities. This on going verification process has a flow on effect. Dairy farmers need to assess the food safety risks associated with farm inputs and ensure appropriate management strategies are in place to manage these risks. This includes full traceability up and down the input chain.
The dairy industry operates within a number of government regulatory frameworks; there is a layered approach to food safety involving the State agencies, FSANZ and AQIS.
Trade risks
Australia has one of the safest food supplies in the world - we must maintain our deserved reputation as a supplier of safe food. However, with the worldwide coverage of food-borne illnesses and some recent examples of systems breakdowns (eg FMD in UK and BSE infections to name two) there is increasing consumer and market expectations for assurances about the safety of food.
Aligned with this is a move by some consumers to seek less processed or more ‘natural’ foods. Thus it is increasingly important for the dairy industry to not only demonstrate that if has the right systems in place to deliver safe food, but that the systems do deliver.
As well, some export markets are using food safety concerns to introduce more restrictive entry requirements eg increased requirements for product testing.
Commercial pressures also require the dairy industry to implement systems that are transparent and seen to deliver safe food at all points in the chain. Increased concern about issues such as BSE translates into increased concern that inputs such as stockfeed comply with legislative requirements regarding ruminant feeding bans.
The use of agricultural and veterinary chemicals is a major source of trade risk for the dairy industry. When chemicals are registered for use in Australia, but not in other countries, or when the Australian Marls for chemicals are higher than those of our export customers government requirements, the dairy industry has to justify the rationale behind this to importing countries. There is both a perceived and potential risk of the transfer of agricultural and veterinary chemical residues to milk. This risk must be managed.
With the development of GM crops, dairy companies are seeking assurances as to the GM status of stock feeds so they can then confirm the GM status of milk. Customers want to know whether cows have been fed GM stock feeds and dairy companies want the freedom to choose GM or non GM feedstuffs, hence the need for credible differentiated supply chains that can deliver.
Management of risks
Dairy farms are subject to audit under legislation to verify that the food safety risk management systems they have in place are working.
The dairy industry, while still predominantly pasture based, is a major consumer of stock feeds. This growing consumption has highlighted the need for the industry to better understand the nature of the risks associated with stockfeed consumption. These risks include physical, chemical and microbiological contamination of stock feeds that may result in unacceptable residues in milk.
The dairy industry is taking a more proactive stance with respect to agricultural and veterinary chemicals. The Australian Pesticide and Veterinary Medicines Authority (APVMA) seeks input from potentially affected groups each time an application is made to register a new chemical. The dairy industry, in responding, takes a trade risk approach to these applications, not just a food safety approach.
Dairy companies test milk and finished products for a number of reasons, residues being one. Nationally, the Australian Milk Residue Analysis (AMRA) Survey provides an independent, credible monitoring tool to help manage agricultural and veterinary chemical risks. It is co-ordinated by Dairy Food Safety Victoria (DFSV) on behalf of all Sate dairy food safety authorities. It also helps underpin dairy exports as both AQIS and the EU accept that it meets the EU’s need for an independent monitoring system.
The AMRA survey will be used much more strategically in future to help monitor industry risk associated with agricultural and veterinary chemical usage - targeted testing being one strategy.
As well as random samples, targeted milk samples will also be taken during periods of potentially peak usage of agricultural and veterinary chemicals and stock feeds. The samples will then be analysed to verify that our risk management systems are working.
Some withhold periods and usage information on the labels of some chemicals used for grains and crops have been based on the assumption that there will only be limited application in any one region and milk will be placed in bulk milk silos before being used. This is no longer the case, with milk from a single farm sometimes going directly into product manufacture and not via bulk milk silos. The dilution principle for managing potential agricultural and veterinary chemical residues is no longer valid.
On farm dairy food safety programs have integrity underpinned by legislation, are independently audited and are now accepted practice. The industry is now seeking the same level of assurance from suppliers to the dairy industry at both farm and factory level.
If dairy input suppliers are able to assure the dairy industry that they have the necessary systems in place to assure product safety, including traceability and verification of systems, and then dairy manufacturers will not seek to individually audit input suppliers.
Dairy industry customers (supermarkets, overseas customers etc and importing country governments) all require a level of assurance regarding dairy product integrity across the whole chain. The industry, while trying to have its systems accepted as delivering safe food, is still subject to audit by these customers. The dairy industry does not want to transfer this level of audit duplication to its input suppliers, but does need to know that inputs will not create trade risks.
Challenges
The challenges faced by the dairy industry are the same challenges faced by all food businesses – how to meet the needs of all its clients (dairy product clients and regulatory agency clients) and not be forced to implement duplicative systems.
The industry is seeking to ensure the current regulatory and commercial food safety environment it operates in is well understood.
Any requirements should be assessed against the existing requirements, so that if there are gaps identified, they can be addressed through add ons to existing systems, not through creating completely separate systems.
The dairy industry is a global food processing industry. It has to ensure its customers are provided with safe food, but it also has to ensure its products deliver the quality sought by the specific markets. It must also be globally competitive with other dairy products and with alternatives to dairy products being provided to these same markets, as well as competing with imports into Australia.
It is unsustainable having unnecessary and duplicative requirements – the dairy industry is working together to try to reduce the layers of both regulatory and commercial requirements. However, at the same time, the industry recognises the need for regulation and the role it plays, as well as the need for the industry to assume responsibility for the safety and integrity of the products it makes. The dairy industry has demonstrated, through its programs, that it does understand this and will continue to evolve its systems in line with changing needs.
*Helen Dornom is manager of the Technical Issues Group for Dairy Australia. For more information, contact Helen on (03) 96943 897 or email: hdornom@dairyaustralia.com.au