mmg.com.au

ABARES is forecasting a two per cent improvement in global dairy prices this year, following two years of sharp fall in prices for Australian dairy farmers.

Presenting the forecasts for dairy prices to 2017-18 at the annual Outlook Conference, ABARES economist Trish Gleeson said higher world dairy prices expected in 2013-14 could see Australian farm gate milk prices increase to an average 39.4 cents a litre.

‘‘The price rise is due to increasing global demand for dairy products. It is largely driven by consumers in developing countries, particularly in Asia,’’ Ms Gleeson said.

‘‘However, growth in supplies from key exporting countries is expected to be limited.

‘‘Australian milk production is expected to increase during 2013-14 with some expansion in dairy herds in Victoria, southern NSW and Tasmania.

‘‘This expansion in the southern states will be offset somewhat by lower production in the regions that rely more on the drinking-milk market.

‘‘The value of Australia’s dairy exports is forecast to increase by close to two per cent in 2013-14 to around $2.3billion, mainly through higher cheese and skim milk powder exports.’’

Graeme Nicoll of Victoria’s Montrose Dairy said Australia was well placed to meet future challenges.

‘‘Dairy businesses are operating in a new norm. That is, a volatile market place that has significant implications on business management,’’ Mr Nicoll said.