September 17, 2014

A coming free trade agreement (FTA) between China and Australia, expected to happen by end 2014, may significantly benefit dairy farmers in Queensland, ABC Rural reported.

According to Brian Tessmann, the president of the Queensland Dairyfarmers Organisation (QDO), the agreement could push up dairy prices and offer farmers more market choices.

"Dairy is a key issue in this FTA, so we really need it to do a good deal... but if it doesn't really address the dairy issues, I think we need to hold out until we really get a good deal", Tessmann said.

He added that dairy farmers in the southern exporting states stand to be the biggest beneficiaries. Obtaining better prices on their side could also produce a major effect on the national market.

Queensland is currently exporting fresh milk to China through Norco, with the possibility of rising involvement from other players. Tessmann explained that milk is going via New South Wales, but could be partially redirected through a plant on Queensland's Gold Coast.

In the meantime, pacifying the milk price war between the supermarkets remains high priority in Queensland. QDO says that it prevented the domestic market from responding aggressively to increases in the international market.