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Situation and Outlook report for February 2016.

Dairy Situation and Outlook February 2016

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Dairy Australia analyst John Droppert answers some key questions surrounding the current outlook for the Australian dairy industry and factors driving the global market. 

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Download the Dairy Situation and Outlook - February 2016 (PDF, 4MB)

Overview

  • Low global dairy prices, dry conditions and high input costs are tightening margins for Australia'™s dairy farmers, and reducing national milk production
  • Dairy Australia is expecting an overall drop in milk production for 2015/16 after a slow spring and summer. The national volume was down 0.2% for the season at the end of December.
  • Elevated prices for grain and hay, combined with lower milk prices, have reduced the incentive for farmers to draw on alternative feed sources to maintain or grow production.
  • Australia'™s stable domestic market and a more favourable exchange rate are helping to buffer the impact of declining world prices, high input costs and the dry season.
  • Lower milk flows have given Australian processors room to move in adjusting their product mix to optimise returns and also help mitigate lower commodity prices.
  • Supply and demand on the international front remains out of balance. Production in the northern hemisphere has increased, while global demand has been on a slowing trend - forcing international commodity prices lower. Exports to the Middle East and China have eased.

Major Initiatives

Focus Farms

Dairy Australia has established a network of Focus Farms to support farmer decision making.

DairyBase

DairyBase is a web-based tool that enables dairy farmers to measure and compare their farm business performance over time.

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