Dairy tough times continue, but farmers are resilient
POSITIVE signs are being seen in the Australian dairy industry, according to Rural Bank and Rural Finance's December 2016 Australian Dairy Update.
This is after a challenging period.
The Global Dairy Trade Index has reached its highest point in almost two years and skim milk powder has fetched its highest average price - $3,457/tonne - at auction since April 2015, above the five-year average.
Cheese prices have also followed suit, recording a price of $5,048/tonne, the highest average price received for the product since August 2014.
The recovery of the sector, however, has proven to be a slow one, as evidenced in the new report.
National milk production is down by more than 10% year-on-year, as is supply which has recorded a reduction of around 10% per month since the turn of the 2017 financial year.
Dairy exports are also in sharp decline, with the total value of exports for the third quarter of 2016 down 11% on the same period last year, and by more than 8% per cent in total year-on-year.
General Manager Agribusiness for Rural Bank and Rural Finance, Andrew Smith, said the fundamentals of the dairy sector remain sound despite the volatility and challenges it continues to face.
"While skim milk powder prices have bounced back this quarter, the Australian dairy industry as a whole still faces significant challenges across the board," he said.
"The only constant in the dairy industry in recent years has been volatility, and 2017 will be no different. However, we believe the ability of Australian dairy farmers to manage volatility will win through in the end."