May 16, 2011

 

Australian heifer exports may slow down

 

 

Australian dairy farmers exported record numbers of dairy heifers in the past year, but this strong demand may not continue.

 

Rising farm gate prices, a strong dollar and stricter pedigree information could stifle demand in the coming year. According to the Dairy Australia 2011 National Dairy Farmer Survey, 15% of respondents reported selling heifers for export compared with 16% last year.

 

Between July and February, about 77,000 heifers were exported from Australia, 20% more than the previous 12 months, and more than double the figure in 2007.

 

Up to 57% of West Australian farmers reported selling heifers for export, while only 1% of Queensland farmers did.

 

In Victoria, 21% of surveyed farmers took advantage of the export market for additional cash flow in Gippsland, compared to only 11% in the northern Victorian Murray Dairy region and 13% in the Western District.

 

Dairy Australia's Situation and Outlook report said that several factors could influence this trade, including China requiring stricter pedigree information, such as providing three-generation details for imported breeding animals.

 

"While this requirement has previously been waived and animals with partial pedigree documentation have avoided a 29% duty, the imposition of more stringent standards would reduce the ability of farmers to access this market without being dedicated Holstein breeders," Dairy Australia said.

 

Other factors that could limit the amount of dairy heifers exported from Australia include improvements in seasonal conditions and a stable market outlook.

 

These could all be incentives for farmers to retain heifers in their herds. Elders operations manager Scott McDouall said he expected strong demand for export for the next two to three years. "It's strong for the foreseeable future, obviously strong in the Chinese market at the moment, but also plenty of interest from old markets like Russia and plenty of interest from emerging markets like Turkey," he said.

 

McDouall also said there were opportunities to export cross-breeds into the emerging market of Pakistan. "As we see Pakistan mature over the next 12-18 months, we see more and more requirement for these types of heifers particularly because they adapt (to) the environment better," he said.

 

But this export industry, which has provided vital cash flow for many dairy farmers, could be under threat due to high farm gate heifer prices.

 

The estimated farm gate prices for export Holstein heifers range from AUD1,100 (US$1,162) to AUD1,150 (US$1,215) for smaller heifers about 120 kg; this increases to up to AUD1,250 (US$1,320) for 200 kg unjoined heifers, with heavier cattle commanding AUD1,350 (US$1,426) to AUD1,400 (US$1,479).