Treasurers Report

When setting the budget for the 2022/23 financial year, the Board took the risky position to budget for, and investment into the future of the Association by making a commitment to engage and support a Field Officer to drive memberships and services. This investment led to the Board approving a substantial budgeted loss for the year, it was a considered investment into the longerterm viability of the Association.

It is pleasing to report that the Association while still finishing the year with a loss, that the loss was far less significant than what was budgeted for.

Our investments provide the foundation of our financial stability and while our income returns were again strong and within expectations, the overall value of the investments decreased significantly in line with Australian and global economic conditions. Rising interest rates, a looming global recession and the war in eastern Europe were all contributing factors to this decline. Throughout the year, the Association was also required to draw down on the investment to provide the necessary cash flow to the business.

During the year, the Board took the initiative to support global growth opportunities for Australian Jersey genetics with the trade mission to both World Dairy Expo in the USA and Pakistan. These were unbudgeted trips however with the securing of an EMDG grant during the year, we will recoup up to 50% of our unbudgeted expenditure in the coming year.

Export revenues continued to decline and market indicators for our key market of China continue to forecast a softening market for Australian heifers. The Association is working hard to leverage the China centric risk of our export revenue in expanding market opportunities with new and growing opportunities with Indonesia and Pakistan for jersey heifers in the coming year.

Member services, in particular registrations which exceeded budget by 53% were strong for the year which was a positive indicator on the value of the engagement of the Field Officer. Classification and Memberships were relatively static to expectations with transfers well down on expectations.

The Association worked tirelessly throughout the year to reduce and control core expenditure and we managed to reduce our costs where possible.

The Association has set an objective to deliver our member services as cost neutral to ensure we are not relying on investments or revenue to fund service needs. For the coming year we have implemented a new booking fee for class services with a $2.00 per cow fee on booking. A review of our 2022/23 year identified 40% of cows booked in for classification were either not presented or did not move score. This equates to nearly 3000 cows for the year with a cost to provide the service to these cows being close to $20,000 per annum. The new fee will not cover all costs associated with assessing cows who are not moved from their current score but will be a reasonable contribution to covering the cost with providing the class assessment to these cows. The Association does expect to see a reduced number of cows booked for class but an overall increase in the percentage of cows receiving a higher final score leading to reduced costs but an improved return on the cost to deliver classification services.

Overall, the Association reported a loss of$185,573 against a budgeted loss of -$132,287. Taking into consideration the overall negative performance of our investment and unbudgeted costs for trade mission, the Association financial performance for the year while unacceptable was far better than expected at an operational level which gives us confidence, that we are achieving improvements in the things we can control.

Key Revenue Trends

Australian Jerseys. Dairy's Finest Cow

Genetics and Breed Development

As I reflect across the year and the keynote achievements for the Breed, it is somewhat challenging to consider what to write when our most significant achievement is ongoing stability and strength of the Breed. This does not suggest that the Association has been inactive in genetic and Breed improvement.

The Australian Jersey is the world’s best jersey, and we continue to see strong growth and demand both domestically and globally for our world leading genetics. At home we see Jerseys achieving a slight increase in the % of Jerseys as part of the National herd as per the National Stats, strong sales results for registered jerseys continue demonstrating the value proposition for registered jerseys and with strong cohort of bulls entering local AI programs and to an expanding number of AI companies.

International demand for Australian jersey genetic is high and growing. This creates great confidence in the breeding programs set by you the member is guiding the Australian jersey in the right direction and I congratulate you all for the collective effort you have all made.

Our classification team has delivered another big year across Australia with strong bookings received continuing trends of recent years of increase service requirements. Class results have been positive with stable trends on traits, demonstrated improvement in key areas of focus by the class team and tighter correlations between linear and bottom-line scores ensuring our class systems remains strong and valuable part of the services Jersey Australia provides.

Across the year we have seen strong usage and reference to the Jersey Most Profitable and Sustainable Cow Project completed by the Association in 2021/22 proving the value of our investment in demonstrating the value of the Australian and global jersey. The report was well referenced during the General Managers visit to Pakistan and meeting with Indonesian industry representatives and Dr Steve Little provided the keynote address at the Jersey NZ AGM and conference.

As we look forward to the year ahead, we will in partnership with our members and breeders help shape the ongoing direction of the Jersey breed with the next National Breeding Objective. Expanding research is starting to validate some of the findings in the Jersey Most Profitable Cow project on how biological variations between breeds of dairy cows has varying effects on key traits demonstrating a greater need to ensure our ABV’s are fit for purpose at a breed level. Your involvement in setting farmer objectives will be critical and I encourage you all to participate in this process.

Chair