Dairy Industry Situation & Outlook
Dairy Australia’s ‘Dairy 2010: Situation and Outlook’ report provides a summary of current industry conditions, and the outlook for key factors that affect dairy farm operation and profits.
To read the full Situation & Oulook report visit www.dairyaustralia.com.au
Key points from the 2010 Situation & Outlook report:
• The dairy industry continues to ride the rollercoaster – with a significant improvement in operating conditions compared to 2009.
• Since bottoming in Feb 2009, international dairy commodity prices have increased 80% in US$ terms, but just 30% in $A terms, reflecting tightening supplies & recovering demand in line with improved economic conditions.
• While dairy market fundamentals are sound, economic instability is the key risk to the improving price outlook. Dairy Australia is forecasting an opening price in the range of $4.40-$4.60 per kg milk solids (kgms), implying a full year price range of $5.00 and $5.40 per kgms. This assumes dairy commodities trade at around current levels, and the Australian dollar is in the range of 90 to 95 US cents.
• While many farmers are looking at the best conditions for years, volatility in markets & margins has seen confidence levels unchanged, & greater cautiousness in terms of future production growth.