World dairy product prices are forecast to remain relatively firm in 2010-11 after rebounding from the low prices experienced in mid-2009, delegates were told at the ABARE annual Outlook conference in Canberra today.

John Hogan, Manager of ABARE’s Agricultural Commodity Analysis, said as world economic recovery strengthens and demand for dairy products picks up, world dairy prices are projected to remain relatively high although they will be below the peak of 2007-08.

“This is expected to be driven by increasing demand for dairy products, particularly in the developing economies of North Africa, the Middle East and Asia,” Mr Hogan said.

“In line with these expected developments in world dairy markets, Australian farm-gate milk prices are projected to rise over the next few years.

“Australian milk production is also expected to increase over the medium term as milk yields continue to improve. However, dairy farmers in the main irrigation areas are likely to continue to face challenges associated with water availability and climate variability.”
The Chairman of Dairy Australia, Max Roberts, said Australian dairy farmers have a long history of dealing with volatility and adapting to a changing environment.

“In recent years the degree of volatility and uncertainty has increased for farmers both in markets and climate. Now more than ever, farmers need to understand their operating environment and their total farm position,” Mr Roberts said.

“The dairy industry is working with farmers to build resilient businesses by providing information and tools, and up-skilling farmers and their advisors.”

Jane Bennett, Managing Director, Ashgrove Cheese Pty Ltd presented a personal story on the growth and development of her family operated dairy company.

“Our family company has grown through focussing on providing value to customers,” she said. “In recent years we have changed our packaging to better reflect our farm cheese and this has resulted in strong growth in retail sales,” Ms Bennett said.