Dairy farmers have been on a roller coaster ride, from a horror year last year to near record prices this year.
The outlook for dairy, issued by the commodity forecaster ABARES, predicts cash incomes nationally to rise threefold, from $44,000 (2012-13) to average $129,000 per farm this financial year.
«That’s 30 per cent above the 10-year average,» says Peter Collins, the manager of agricultural commodities at ABARES.
Driving that are exports and world dairy prices, which are both forecast to continue rising.
«The value of Australian exports of dairy products is forecast to rise by 14 per cent in 2014-15 to $3.4 billion, reflecting forecast higher world dairy product prices and an assumed depreciation of the Australian dollar.»
World prices are also expected to rise next financial year, for milk powder and butter by 2 per cent, and for cheese by 3 per cent.
Farm gate returns will continue to rise next year, by 5 per cent, to average 50 cents a litre, but ABARES forecasts a slight fall in returns out to 2017-18.
Ninety-four per cent of Australia’s exports head to Asia and the Middle East, North Africa regions.
ABARES has crunched the figures to demonstrate that over the past ten years, Australia’s exports to the Middle East/North Africa region, particularly Egypt, have risen from 11 per cent to 32 per cent by value.
But Australian dairy farmers have some international market disadvantages.
Dairy analyst Jo Bills, from Fresh Agenda, says Australia’s dairy farmers will receive 15 per cent less in their pay cheques than New Zealand farmers.
«Australian farmers are quite rightly looking across the ditch and thinking our prices are getting better, but not quite that good.
«So there are some interesting differences in terms of market exposures.
«New Zealand is very much focussed on whole milk powder, the biggest import product for China, and that’s where a lot of the growth has been in the last 12 months.»
Source: ABC