Positive year ahead for Australian dairy, Rabobank predicts

Despite a difficult past season, the Australian dairy industry can look forward to a more positive year ahead, according to Rabobank’s Dairy Quarterly report.

According to the report, the outlook for the sector in 2013/14 is much improved, due to a combination of higher farmgate prices, better seasonal conditions and some relief in feed costs.

Michael Harvey, Rabobank senior dairy analyst, said the 2013/14 milk price had increased more than 20% on last season’s opening price, with Murray Goulburn announcing a price of $5.60 per kg MS. “This is supported by high world pricing and a weaker local currency,” Harvey said.

Milk production volumes declined rapidly over the tail end of the past milk season, the report shows. Production volumes were down 7.6% in May and season-to-date output is trailing last season by 2.7%.

“Rabobank expects milk supply to edge up by 1% in the second half of 2013, then by 2% in the first half of 2014, generating a small increase in exportable surplus over the period,” Harvey said.