May 11, 2011
 

Australia to have a good dairy year

 

 

Dairy Australia strategy and knowledge manager Joanne Bills said the global price outlook for dairy products was good in contrast to last seasons.

 

"We are not seeing commodity prices moving up with any purpose, they are going sideways and milling around at current levels," she said.

 

The high and variable dollar continues as an area of concern in forecasting next season's milk price, while there have also been questions about the impact of global dairy product supply.

 

Bills said at this stage it appeared any increase in supply would be absorbed by demand, but she was unsure what would happen if New Zealand had a bumper year.

 

She said next season could be a chance for southern dairy farmers to claw some financial security back after the price crashes in 2008-09.

 

This season, farm cash incomes are expected to rise almost 30% to AUD100,000 (US$108,615), according to the Australian Bureau of Agricultural and Resource Economics (ABARE).

 

A marginal profit of AUD5000 (US$5431) was also projected for farm businesses, compared to a loss of AUD1400 (US$1521) last season.

 

The percentage of farms with a farm business loss has also dropped, from 59% to 55%.

 

Slight improvements in farm-cash positions do not appear to reflect on industry growth intentions.

 

Nationally, 46% of the 1000 farmers questioned as part of a Dairy Australia national survey planned to grow their production in three years' time. This was down from 50% last season.

 

The proportion of farmers who feel confident about the industry this year rose 4% to 69%. However, it varied between the regions.

 

Fonterra was the first dairy processor to make an opening price announcement last year.

 

It is expected to announce an opening price as early as this week.