‘Relief in sight’ for dairy

June 28, 2017

Glenn Fox, of Merton, Rabobank Shepparton's Matt Trevaskis and Murray Dairy communications officer Melva Tyson.

Dairy Australia analyst John Droppert summarised the most recent Dairy Situation and Outlook report for June. He said the industry was heading in the right direction.

Despite dairy farmers’ trust in processors falling in the past 12 months, the industry looks like it is turning a corner.

That is the message from Dairy Australia’s most recent Dairy Situation and Outlook Report.

Speaking at a Murray Dairy event in Shepparton last Wednesday night, Dairy Australia analyst John Droppert said three key themes had come out of the June report.

‘‘The report shows that farmers are having ongoing issues with the supply chain but have an underlying confidence in their own business, the market conditions are looking okay and there is relief in sight,’’ he said.

Despite 28 per cent of farmers changing or wanting to change processors in the past year, they were more positive about their chances of maintaining their business.

‘‘A vast majority of farmers are expecting to grow or maintain their business in the next three years,’’ Mr Droppert said.

He said the National Dairy Farmer Survey found there was an 80 per cent correlation between milk price and confidence and that the reason for the low prices was a lack of international players in the market.

‘‘Most major countries were out of the market.

‘‘In Europe, milk production slowed down, US suppliers pulled back knowing there was a lot more money at home and New Zealand had a wet spring which pushed production down.’’

Mr Droppert said in general, demand on the international market was growing, even in Russia where they banned most food imports from a range of Western nations in 2014.

‘‘The growth in Russia is due to the Kiwis selling more into Russia. New Zealand was one of the few countries not to be banned,’’ he said.

When it comes to the domestic market, Mr Droppert said there were definitive trends in the purchases of yoghurt and milk.

‘‘There is a trend from sweet to Greek or natural yoghurt and also there is a drift back to the purchase of private label fresh white milk,’’ he said.

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