AUSTRALIA has largely been isolated from a drop in the international dairy price due to significant domestic sales, a Tasmanian dairy industry conference has been told.
Dairy Australia Managing Director Ian Halliday told the DairyTas conference, in Burnie, China had built up stock, towards the end of last year, and the Russian ban also contributed to oversupply.
But he said Australia had been protected from an average 25 percent reduction in prices, in 2013-14.
“It’s important to remember we still sell quite a lot of milk on the domestic market, one of the few developed countries that does,” Mr Halliday told the conference.
‘In the US and Europe, consumption of dairy products is on the decline.”
“We have been a little bit protected, partly because we sell 55pc, into the domestic market.”
NZ has seen a 44pc reduction in milk prices in the last 12 months.
“We do get protected against the real lows, yes, we don’t see the real highs, but we don’t see the real lows.”
Production figures increased, for February and the year to date,
In February, 662ml was produced, up 5.9 per cent on last year, while the overall Australian production was 6804ml, up 2.7pc.
Tasmania was leading Australia, with at 10.7pc increase in production, for the year to date.
Industry analyst John Droppert said a cooler than average February and reportedly improved conditions in Queensland helped hold national production well above a particularly weak February last year.
“Qld, NSW and SA had particularly slow months – all more than seven pc below last year – in February but there were some substantial improvements to trend, almost across the board.”
Processors should start to release price guidelines within the next six weeks.
Domestic demand remained steady, said Mr Halliday.
“It’s important to remember we still sell quite a lot of milk on the domestic market, one of the few developed countries that does.
‘In the US and Europe, consumption of dairy products is on the decline.”
Dairy Australia’s overall assessment was that there would start to be a recovery in prices, towards the end of the calendar year.
“While processors are very cautious about forward projections, overall the medium to long term scenario is still very positive from an industry perspective.”
