FORECAST: Dairy Export Earnings To Flood The Milk Churn by 24 Per Cent

DairyGetty / Scott Olsen

No wonder everyone wants a piece of Australian dairy companies.

Dairy products, leading a general jump in Australian farm export earnings, are forecast to increase by 24 per cent this financial year.

The would bring the total value of Australian dairy exports to $2.8 billion.

The increased earnings are being driven by higher dairy prices on world markets and an assumed depreciation of the Australian dollar.

Several companies, local and international, are in a bidding war for Australia’s oldest dairy company, Warrnambool Cheese and Butter .

Overall, farm exports are forecast to hit a record high of $38 billion this financial year, with better prospects for beef, veal, wine on top of dairy products.

Export Earnings Forecasts for 2013-14 from the Bureau of Agricultural and Resource Economics and Sciences (ABARES):

  • Livestock and livestock product earnings to rise by 11.9 per cent to $16.7 billion.
  • Beef and veal up 12 per cent to $5.4 billion.
  • Dairy products up 24 per cent to $2.8 billion.
  • Wine up 4 per cent to $1.71 billion.
  • Fisheries products up by 6.2 per cent to $1.25 billion, following a decline of 4.2 per cent in 2012-13.
  • Crop exports to fall by 7.4 per cent to $21.3 billion, reflecting lower world prices for grains and oilseeds.

ABARES Executive Director Karen Schneider says that if farm exports reach the forecast $38 billion, this would be a record high in nominal terms and around 8 per cent above the average over the five years to 2012-13 in real terms.

The December edition of Agricultural Commodities report says gross value of farm production is forecast to increase by 6.3 per cent to $50.9 billion in 2013-14, compared with a small decline of 0.3 per cent in 2012–13.

For Dairy, the Australian average farm gate price for milk is predicted to rise by 22 per cent to 47.7 cents a litre.

Australian milk production will decline slightly to 9.1 billion litres in 2013–14.

China, the world’s largest importer of milk powders, is estimated to have imported more than 500,000 tonnes of whole milk powder and around 155 000 tonnes of skim milk powder in 2013. This is 16 per cent more than in 2012.

China’s demand for imported milk powder is expected to remain strong in 2014, driven by continuing consumer concerns over the safety of local dairy products.

This chart shows the expected movements of farm commodities this financial year:


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