Australian dairy farmers feeling the pain of Russian trade bans

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The effect of Russian trade sanctions are being felt by the Australian dairy industry, with manufacturers being squeezed on prices, and prices paid to farmers remaining subdued.

In August, Russia banned imported food productsfrom Australia, the United States and the European Union
While Russia is not a big market for Australian dairy products, the flow-on effect of European dairy products, that would normally be sold into Russia, ending up in other global markets, has contributed to a sharp drop in world prices for milk powder.
At the start of the year whole milk powder was selling for around US$5,000 a tonne, but since then the price has almost halved to US$2,600, the lowest level in five years.
Dairy industry analyst Joanne Bills, of Fresh Agenda, says increased supply from countries like New Zealand, and weakening demand from China have contributed to the price fall, but the Russian trade bans have also had a significant impact.
«A lot of European production that would have been made into cheese, that would have turn been sold into that Russian market, is now where possible being diverted into production of skim milk powder, and to an extent whole milk powder,» Ms Bills said.
«On top of the fact that New Zealand’s having a reasonably good season and they’re a big supplier of whole milk powder, that’s really adding to the oversupply, particularly of milk powders, for the international dairy market.»
With just under half of Australia’s milk production destined for export markets, Australian milk prices are strongly influenced by the international market.
«So when we see commodity prices pushed to very low levels, that will inevitably flow through to Australian farm-gate prices,» Ms Bills said.
She says a lower Australian currency has provided some relief for local dairy manufacturers, but the prices they pay farmers are not likely to increase any time soon.
«Most dairy companies have already flagged that there won’t be any step-ups in prices this season, and they’ll really be holding on to make sure that they can deliver the opening price that they’ve put out there for farmers.»
 
Source: ABC

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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