Global market conditions improve but rising costs hamper balance sheet repair

20 June 2018

Dairy Australia
20 June 2018

Dairy Australia’s latest Situation and Outlook report has delivered a better-than-expected market picture, with global supply and demand fluctuations shifting in favour of Australian farmers.

While global market forces and domestic competition for milk supply looked set to usher in better farmgate prices, high operating costs and decreased farmer confidence were expected to restrict production growth to about 1 per cent in 2018/19.

Dairy Australia senior industry analyst John Droppert said a run of dry conditions across many dairy regions through late summer and most of autumn was likely to limit the short-term impact of any price rises on farm balance sheets.

Tight margins and difficult seasonal conditions in 2017/18 hit Australia’s northern, domestic-focussed dairy regions hardest, prompting an increase in farmers exiting the industry in those areas.

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