First Milk Home

Nicola Raymond was brought up on a dairy farm in Pembrokeshire. Having travelled extensively after winning a Nuffield Scholarship in 2006, she now finds herself in Melbourne working for a specialised communications firm where her clients include Dairy Australia. StraightTalk asked Nicola to give us a snapshot of what’s happening in the Australian dairy market.

“Dairy farming in Australia is the third largest agricultural industry with a farm gate value of $A3.2 billion (around £1.6 billion) in 2007. There are 8,000 dairy farms across Australia with an average of 227 dairy cows per holding.

“Australia’s milk production is seasonal with October having peak production and June lowest production. Seasonality reflects pasture-base of production and holdings on coastal areas rely on natural rainfall whereas inland depends on irrigation.

“The industry produces 23% of total production as liquid milk. Within manufacturing, cheese represents 35%, butter 23%, milk powder 11% yoghurt 5% and casein 3%.

“All States have dairy holdings that supply fresh milk to urban markets. Yet most milk production is concentrated in the south-east of Australia which accounts for over 80% of total production.

“While the domestic market in Australia for dairy products is a mature one, it is still delivering solid volume and growth. There are also a multitude of branded milk products in Australia, far more than in the UK which fuels retail demand and offers choice to consumers.

“Australia currently exports 50% of its annual milk production, with Asia and most notably Japan, the largest market. With continued potential for growth, the Australian dairy industry has focused on Asian markets in recent years.

“Conditions were tough for Australian dairy farmers in 2006-7 with severe drought leading to a 6% reduction in production and a fall in on-farm profitability. Reduced water availability and increased input costs for grain and forage proved a huge challenge for many, with rising oil costs also increasing fuel and fertiliser.
“The 2007-08 season however, is likely to see Australian farm gate milk prices rise by up to 33% to an average of 44 cents per litre (22ppl), although a full recovery is dependent on autumn and winter rains.”