Overseas dairy imports flooding Australian market but prices on the upwards
Dairy products are flooding into Australia from overseas despite local farmers struggling to stay afloat.
Things may however soon turn around for Aussie dairy farmers with some improvement in drivers of farm profitability.
New data from Dairy Australia shows that dairy imports into Australia in Quarter 4 2016 nearly hit the 8,000 tonne mark, a significant increase on the little over 2, 000 tonnes which entered Australia in Quarter 2 2010.
By contrast, in Quarter 4 2016, Australia exported just over 6, 000 tonnes of dairy overseas.
Despite the overseas competition, Dairy Australia Senior Analyst, John Droppert, said the 2017 calendar year has started on a more positive note for the industry even with overhanging issues from the events of 2016.
“Better seasonal and margin indicators are encouraging, but ongoing challenges surrounding confidence and trust remain big impositions for many farmers in southeast Australia,” Droppet said.
“Improved farmgate profitability will help, and the current market settings look conducive to delivering this, albeit not without risk given the threats posed by resurgent supply growth internationally and broader political and economic disruption,” he continued.
“It’s also important to acknowledge that in many domestic-focused regions, farmgate prices are coming under pressure, so these farmers are at a different stage in the cycle,” he said.
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