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Dairy Australia Fortnightly Update

21 May 2013
Dairy Australia

AUSTRALIA - Milk production is expected to reach 9.35bn litres in 2012/13—down 1.4 per cent on 2011/12 output of 9.48bn litres, according Dairy Australia in their recent outlook report.

The outlook for 2013/14 is for modest production growth to between 9.4 and 9.6bn litres, based on surveyed herd growth intentions, cow condition and assuming normal seasonal conditions provide an offset to limited fodder reserves.

The outlook for indicative southern farmgate milk prices, based on current commodity price and exchange rate expectations is for an opening price around $5.00/kgMS, up from an average opening price around $4.30/kgMS in 2012.

This implies a potential full-year average price around $5.50/kgMS, up from $4.90 to $5.10/kgMS in 2012/13. The sharp increase in commodity prices during calendar Q1 2013 suggests there is upside to a $5.00/kgMS opening price depending on processor carryover benefits and value-added
sales late in the 2012/13 season.

Murray Goulburn (MG) has been holding meetings with dairy farmers in NSW. MG is talking to farmers in the NSW’s Hunter, the north and south coast regions about the co-op’s plans for its planned milk processing facility in western Sydney and future milk supply for its recently announced entry into the fresh drinking milk market.

MG is expected to take on NSW suppliers to fulfill requirements under its 10-year contract to supply Coles with approximately 200m litres of private label fresh drinking milk.

Dairy Australia released its flagship Dairy 2013: Situation and Outlook report released earlier this week.

Both a summary Short Report and the Full Report are available on-line at: http://www.dairyaustralia.com.au/Statistics-andmarkets/Dairy-Situation-and-Outlook.aspx.




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