DAIRY

 OVERVIEW

The Australian Dairy Cattle Farming industry is experiencing favourable conditions with the industry's almost 1.7 million dairy cows expected to produce 9.4 billion litres of milk in 2013-14. 

 

Domestic milk consumption has grown marginally over the past five years. However, the majority of consumption growth in milk and dairy products has stemmed from overseas markets in Asia and the Middle East. This has translated into increased demand for raw milk from dairy manufacturers and processors, which export products to these markets. This is a significant factor in the forecast rise in revenue in 2013-14. Global production of dairy has increased marginally to meet growing global demand. Australian dairy is expected to meet a significant portion of global demand for processed milk and milk products. Favourable weather conditions over the past three years have resulted in improved pastures, substantially reducing reliance on grain feed.

 

TRENDS

Herd numbers and milk production are expected to increase over the coming five years. Developments in new farming and milking technologies are expected to provide a competitive advantage for farmers that are able to invest further in capital. Demand from overseas markets, where incomes are rising, is expected to support growth over the same period. 

 

Greener pastures are ahead for dairy farmers that survive the increased pressure of consolidation, provided weather conditions remain favourable. 

 

REVENUE

Favourable weather conditions, higher farmgate prices, increased global demand and a depreciating Australian dollar are expected to contribute to revenue growth of 3.3% over 2013-14, to $4.0 billion in 2014/15.  Long-term revenue is forecast to reach $4.2billion in 2018/19.

 

Source: Ibis Worldwide Report Dairy Cattle Farming in Australia, April 2014