Fore­cast pre­dicts dairy come­back on the way

Central and North Burnett Times - - RURAL WEEKLY -

AF­TER a dif­fi­cult 18 months, the Aus­tralian dairy sec­tor is ex­pected to start “climb­ing back off the can­vas”, with lo­cal dairy farm­ing busi­nesses ex­pected to see a much-needed re­turn to prof­itabil­ity in the 2017/18 sea­son, ac­cord­ing to a re­cently-re­leased re­port.

The Aus­tralian Dairy Sec­tor – Climb­ing Off the Can­vas, by agribusi­ness bank­ing spe­cial­ist Rabobank, says ex­ten­u­at­ing cir­cum­stances have meant the re­cov­ery in global dairy mar­kets is yet to flow through the value chain.

How­ever, some of the forces should dis­si­pate in 2017/18, and this will help de­liver higher full-year milk prices for Aus­tralia’s dairy ex­port­ing re­gions.

Based on Rabobank’s lat­est com­mod­ity price fore­casts (out­lined in its up­com­ing Global Dairy Quar­terly) and as­sum­ing a cur­rency rate of USD 0.75, the re­port says the global mar­ket would de­liver an av­er­age com­mod­ity milk re­turn equiv­a­lent to AUD5.30/kgMS in 2017/18.

While the prospects of global com­mod­ity prices re­main­ing el­e­vated through­out next sea­son are sound, the re­port warns there are some risks to the com­mod­ity and cur­rency out­look, which need to be care­fully mon­i­tored.

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