The many challenges encountered by Australian dairy farmers in recent years – not the least of which includes the discounted price being paid for milk by some major supermarket chains – have been well documented in the media.
Canstar’s Agriculture Industry Outlook for 2017-2018[1], notes that despite Dairy experiencing a tough year in 2016/7 with milk production in Australia hitting the lowest point in 21 years, there are some good signs of recovery in sight for the industry.
Among experts forecasting better results in the Canstar analyses, the Australian Department of Agriculture and Water Resources (ABARES)[2] predicts dairy production to increase by 2% to 9 billion litres in 2017/2018 due to an increase in herd numbers. It also anticipates there will be a 7% increase in the price of milk over this period.
In 2017–18 the value of dairy exports is expected to increase by a further 11 per cent due to rising world prices and some recovery in export volumes of other major Australian dairy commodities, such as cheese and skim milk powder[3].
According to the ABARES report, over the medium term, milk production is anticipated to reach 9.6 billion litres per year in the 2021-22 financial year. This prediction is based on the coming shift to low-cost grains and concentrated feeds, which will improve herd genetics and farm technology. This will lead to a knock-on effect where herd sizes will continue to expand and milk yields will improve.
[1] Canstar website: Agriculture Industry Outlook for 2017-2018
[2] ABARES 2017, Agricultural commodities: March quarter 2017. CC BY 3.0.
[3] ABARES 2017, Agricultural commodities: March quarter 2017. CC BY 3.0.
