Milk could be dumped before it can reach supermarket shelves in a worst-case scenario as worker shortages and supply chain pressures intensify in the dairy industry.
The latest warning has been delivered by peak body the Australian Dairy Industry Council (ADIC) amid widespread concerns across sectors over the impact of rapidly rising COVID-19 cases.
Crisis talks between federal ministers and industry have been held this week on which business sectors should have COVID isolation rules relaxed to ease the supply chain pinch.
Deputy chair of the ADIC Grant Crothers said the workforce strain risked creating a “domino effect” disrupting the pipeline of milk supplies from farmers to consumers.
“The worst-case scenario is that [the] milk doesn't get picked up off farm,” he told SBS News.
“It's more than likely, we will see some isolated examples of milk being dumped."
The supply chain disruptions are driving a lobbying effort from the industry body for more action from government to address the concerns.
Mr Crothers said Tasmania’s King Island operation was among producing regions hit by COVID-19 infections and facing workforce shortages.
“When you've got tanker drivers out every day, picking up milk, to lose a third of them without notice, obviously, it puts enormous strain on the supply chain,” he said.
“The challenge for dairy is that we have the most time-critical raw material in the whole food chain.”
Prime Minister Scott Morrison on Wednesday held a joint National Coordination Mechanism and Critical Infrastructure Advisory Council supply chain meeting with members of his government.
Mr Morrison said patience is needed as solutions are sought to fill gaps in essential service roles left vacant by thousands of Australian workers being struck down by COVID-19.
“The challenge of COVID with escalating cases is keeping things moving, that's what riding this wave of COVID means,” Mr Morrison said at the start of the virtual meeting.
"With so many people getting COVID that is clearly going to take more and more people out of the workforce.”
The government is weighing up expanding the definition of essential services to include road, rail and air transport, mental health, education and schooling services, energy supply and clinics and laboratories.
The classification would exempt these workforces from close-contact isolation requirements to reduce the number of essential workers being forced out of work.
Whether essential services mandate a booster shot for staff is also on the agenda, as are additional social measures to reduce the risk of transmission within the workplace.
Supply chain challenges 'disappointing'
Social Services Minister Anne Ruston also hosted a meeting on Tuesday night with representatives from food and
retail associations, transport and distribution associations, the National Farmers Federation (NFF), the Pharmacy Guild, the small business chamber and the Regional Airline Association.
NFF president Fiona Simpson said it was “disappointing” that supply chains had once again been placed “under extreme pressure” without planning ahead of time to address the issue.
“The Omicron shortage has meant we have produce piling up on farms waiting to be delivered and just not being able to be delivered at all,” she told SBS News.
“I do think people would generally think that we may have learnt and may have been able to do some of this strategic planning.”
Businesses as well as the NFF are seeking national consistency and clarity around isolation and testing requirements, and more consistent supply of rapid antigen tests to where they are needed.
Australian Industry Group CEO Innes Willox said they also wanted to see consideration given to temporarily granting work rights to all visa holders currently in Australia.
“This temporary change to visas could be introduced immediately and reviewed when the Omicron outbreak passes its peak,” he said.
“This crisis should force us to think creatively about rules and regulations to identify ways to get all hands on deck in critical sectors.”
The federal government is also considering the extent to which businesses in non-critical industries should stop requiring workers to produce negative rapid antigen tests as they recover.
It is also proposing that people on the Jobseeker unemployment payment could be brought back into the workforce in an effort to alleviate pressure on supply chains.
The issues will be further canvassed at a National Cabinet meeting on Thursday.
