Dairy market report released

The outlook for the global dairy market is positive, however climate continues to present challenges for farmers in a number of Australia’s dairying regions, according to Dairy Australia’s 2011 Situation and Outlook Update report released.

Current operating conditions were making it difficult to give a national overview of the Australian dairy industry. At this stage, Dairy Australia has revised its 2010/11 milk production forecast to between 9.0 and 9.1 billion litres, slightly down from 9.1 to 9.2 billion litres.

Analysis undertaken by Dairy Australia as part of the Update has found international market prices are firming, driven by steady global demand and limited supplies. Demand for dairy continues to rise in China, with whole milk powder imports surpassing expectations during 2010, and are expected to remain strong during 2011.

Dairy Australia modelling suggests the 2010/11 price to southern producers could average between $5.30 and $5.50 per kg MS - slightly higher than the September 2010 Update.