OUTLOOK 2007 7 March 2007 |
 |
| Severe drought hits Australian dairy production hard |
 |
| Severe drought conditions across wide areas of southern and eastern Australia will result in Australia's milk production falling by more than 10 per cent in 2006-07 as reduced water allocations affect farmers" ability to maintain dairy herds and milk yields, the Dairy session of the OUTLOOK conference was told today.
John Hogan, Manager, Crops, Livestock and Food Industries, ABARE made the comments today. "As a result of reduced production in Australia and production constraints in New Zealand and the European Union, world dairy prices are forecast to rise in 2006-07." "However, Australian dairy farmers will not reap the full benefit of the price rise due to forward selling, with the Australian milk price forecast to average around 32.6 cents for the year. Reduced milk production will also mean a sharp fall-off in dairy exports over the course of the year, with earnings from these falling by 16 per cent to $2.1 billion in 2006-07". "On a more positive note, both world and Australian dairy prices are projected to rise over the next two years as a result of slow growth in world supply. The Australian milk price is forecast to peak at around 35 cents a litre (in 2006-07 dollars) in 2009-10, before declining over the remainder of the OUTLOOK period as growth in world supply begins to overtake growth in demand," Mr Hogan added. "Australia's drought affected dairy industry, however, will recover slowly over the medium term as a result of an assumed improvement in water allocations, rising cow numbers and steady increases in milk yields," Mr Hogan concluded. Ashley Waugh, from National Foods explored the challenge of continuing growth and highlighted the importance of identifying growth markets. "Part of our strategy is to build a branded business across the seven core markets of South-east Asia. We also plan to make further acquisitions of synergistic businesses and to drive today"s business harder," Mr Waugh said. Max Jelbart, dairy producer told conference delegates of the importance of on-farm productivity improvements. "Innovation and investment are the keys to increasing productivity – and the fundamentals need to be right to invest. New technologies such as semi-automated milking machines, electronic animal identification and global positioning systems (GPS) can all contribute to improved on-farm productivity, but that"s not the whole story". Mr Jelbart also stressed the importance of optimising fixed and variable business costs and the role of co-operatives in providing marketing for dairy milk production. |
 |
| Copies of available speakers' presentation and papers are available at ABARE's OUTLOOK website, OUTLOOK 2007 or phone 02 6272 2010. For general media enquiries, contact Maree Finnegan, Media Coordinator on 02 6272 2260 or email mfinnegan@abare.gov.au. |
|
 |
 |