March 6, 2014
World indicator prices of a range of dairy products are forecast to increase in 2014–15: whole milk powder and skim milk powder by 2% to average US$5,220 a tonne and US$4,815 a tonne, respectively; cheese and butter by around 3% and 2% to average US$4,920 a tonne and US$4,665 a tonne, respectively.
"The outlook for dairy is promising. Australian milk production and exports of dairy products are expected to rise over the outlook period," Peter Collins, manager of agricultural commodities of the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said.
He also said that it's expected there will be continued strong demand for Australian dairy products from Asia, the Middle East and North Africa. In 2012-13, these markets accounted for around 94% of the total value of Australian dairy exports. The Australian farmgate price of milk is forecast to rise by around 5% in 2014-15.
Collins said that in addition to this expected price increase, Australian milk production is forecast to increase by 2% in 2014–15 to 9.25 billion litres, following a small contraction this year. Over the medium term, Australian milk production is projected to rise to around 10.2 billion litres by 2018–19. The average farm cash income for dairy farms is forecast to rise in 2013-14 to AUD129,000 (US$117,000), an increase of around 192%.
