Dairy market to improve in 2017, according to Rabobank

Rabobank has forecast that the global dairy market outlook will remain weak throughout 2016, with prices expected to pick up going into 2017.
According to the bank’s Global Dairy Quarterly Q1 2016 report, in Australia, local farmgate prices have been largely shielded from the severe global dairy market crash as a result of value-adding strategies adopted by local producers to shift milk away from commodities.
Rabobank Australia senior analyst Michael Harvey said these strategies included focusing on consumer products such as liquid milk and cheese.
Mr Harvey said this approach would undoubtedly continue to be adopted by the Australian dairy sector for the 2016-17 season, with global dairy commodity prices remaining under intense pressure.
NZ dairy prices weighed heavily on the ANZ Commodity Price Index last month, with larger falls centred around casein (down 11 per cent), cheese (down 12.4 per cent) and butter (down 7.7 per cent).

 

Overall it was a mixed bag for the ANZ Commodity Price Index in March, falling 1.3 per cent.
Prices from the dairy (down 4.5 per cent), forestry (down 0.7 per cent) and seafood (down 1.6 per cent) categories were all down for the month.
Tempering the fall was a 2 per cent rise for meat prices, while horticulture and aluminium prices were unchanged.

World prices were down 22.4 per cent year on year, with prices close to one third below February 2014 peaks.
Meanwhile, the agricultural money maker appears to be property, with several large southeast Australian farms hitting the market in recent weeks, attracting interest from Asian firms, local corporates and traditional farming families.
Rabobank Victorian manager Hamish McAlpin said investors were interested in large “trophy” properties, with reliable production systems and fully developed land.
The boom in sales follows analyst predictions earlier this year that the agri property market would kick off this year, and so far the predictions are ringing true.
In horticulture, industry bodies continue to fight the good fight to regenerate demand for product and make the most of export opportunities.
This week Horticulture Innovation Australia announced it had signed a $6 million research deal with Indian Government, and despite a decline in the sector, fresh juice exports have been tipped to help stimulate the fruit and vegetable industry.
According to the Food Revolution Group, which operates a fruit and vegetable processing facility, manufacturing a range of juices, fibres, infused fruits and waters and bioactives will help boost demand for primary production.
Chief executive Bill Niko­lovski rallied the troops, telling delegates at the Citrus Market Outlook Forum last month that consumers concerned about sugar levels and preservatives in juice could be won back if their concerns were properly addressed.

Source: Weekly TImes
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