Dairy farmgate prices to rise

08 Mar, 2017 12:28 PM
Comments
1
 
ABARES forecast for milk production and farmgate milk price.
The big mover is the Russian Federation, expected to resume importing dairy products next year.
ABARES forecast for milk production and farmgate milk price.

THE big declines in Australian milk production should turn the corner in the next financial year courtesy of improving farmgate milk prices, the trend towards low-cost grain and concentrate feeds and yield improvements.

Fodder to fuel milk price lifts for the next three seasons will come from the growing taste for dairy in Asia, the Middle East and North Africa, where both populations and incomes are on the rise.

Reduced turn-off in key dairy countries including New Zealand and the European Union and the re-opening of the Russian market will also contribute upward pressure on world dairy prices.

This is the outlook from Australia’s senior economists, whose dairy forecasts paint a much-welcome dab of optimism for the milk production game in Australia at long last.

In this financial year, world prices for cheese are forecast to lift by 14 per cent, for skim milk powder by 16pc, butter by 31pc and whole milk powder 37pc.

That trend will continue out to 2019-20 before global production catches up to cause a leveling effect.

The big mover and shaker is the Russian Federation, expected to resume importing dairy products from major exporters next year.

Before it implemented the trade embargo in 2014, Russia was the largest importer of cheese and butter.

ABARES says imports will not return immediately to those levels but Russia will certainly contribute to growing demand for global dairy.

Improvements in export returns should flow through to a lift in farmgate prices for Australian producers this financial year of around 2pc.

The good news is that is expected to continue to a 7pc rise in 2017-18, assuming a slight depreciation in the Australian dollar and the forecast higher world prices.

Reflecting those rises, our milk production, which has been in decline and will finish this season 7pc down, should start to lift.

ABARES experts have it at a 2pc recovery in 2017-18 to 9 billion litres and over the medium term rising consistently to 9.6b litres.

FarmOnline
Shan Goodwin

Shan Goodwin

is the national beef writer for Fairfax Agricultural Media.
Date: Newest first | Oldest first

READER COMMENTS

russiancitizen
8/03/2017 12:49:59 PM, on Australian Dairyfarmer

i hope my country will NOT resume imports of anything made abroad i always try to buy russian made products eat your dairy yourselves or sell it to someone else we will consume domestically produced products

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
Australian dairyfarmers are missing out on the opportunity for more profit by not better managing their home-grown feedbase, according to Gardiner Dairy Foundation chair Dr Bruce Kefford.
24 Mar 17 Australian dairyfarmers are missing out on the opportunity for more profit by not better managing their home-grown...
Rick Blackshaw was rightly proud of his oats crop, as he let his dairy herd into the paddock for their first grazing at the end of April last year. 
27 Feb 17 Rick Blackshaw was rightly proud of his oats crop, as he let his dairy herd into the paddock for their first grazing...
light grey arrow
Hi Mike What a ignorant example of multinational company,s point of view. Which company do you
light grey arrow
Our company, ABM Metal Detectors P/L is currently looking into designing a new type of metal
light grey arrow
"Aldi brags on its website that the majority of its brands are sourced from Australian
VIRTUAL fencing for cattle is set to be commercially available later this year, following Melbourne-based agri-tech company Agersens’ success in raising $2 million.03 Apr 17 VIRTUAL fencing for cattle is set to be commercially available later this year, following Melbourne-based agri-tech...
Lindsay Anderson's Gippsland dairy farm uses a lot of electricity. 
30 Mar 17 Lindsay Anderson's Gippsland dairy farm uses a lot of electricity.
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.