September 22, 2010

Australia 2010-11 milk price, dairy exports set to rise

Australian dairy farmers will receive a higher price for milk in the fiscal year ending June 30, 2011, while the value of dairy exports will also rise, the Australian Bureau of Agricultural and Resource Economics (Abare) forecast Tuesday (Sep 21).

Farmgate milk prices will likely average AUD0.385 (US$0.37) a litre, up 3.2% from AUD0.373 (US$0.35) last year, while milk production will rise 2.5% to 9.25 billion litres on the back of improved seasonal conditions.

The value of dairy exports from Australia, which typically accounts for 10% to 15% of global trade depending on local milk production, will rise 7.7% on-year to AUD2.23 billion (US$2.13 billion), it said.

It forecast average world prices for dairy products to rise slightly higher this year, supported by growth in global demand, particularly in Asia, the Middle East and North Africa.

However, higher production in major producing and exporting countries will likely partially offset the effect of increased demand and moderate the pressure for price increases, it said.

Global spot prices for cheese this year will fall 3.5% on-year to an average of US$3,880 a tonne, while average butter prices will jump 6.4% to US$3,700/tonne.

Skim milk powder prices will gain 4.2% on-year to an average of US$3,072/tonne, while average whole milk powder will climb 4.0% to US$3,350/tonne, it said.