Australia becoming a net dairy importer

AUSTRALIA may become a net importer of dairy products within a few years.

European food and drink strategic consultancy and research firm Gira has told dairy farmers and processors that declining milk production and rising domestic consumption could result in Australia importing more dairy product than it exports.

Addressing the Australian Dairy Industry Council, Gira consultant and former Fonterra director Earl Rattray said Australia’s dairy exports had remained flat during the past decade, while domestic consumption had consistently risen, with the gap between each narrowing.

Mr Rattray said Australia was forecast to have flat milk production up to 2023.

“There is increasing domestic offtake,” he said.

“And if we look out to 2023, if something doesn’t change Australia will become a net importer of dairy products.”

Gira has forecast Australia to be the only major dairy exporting country to show declining exports in the next five years.

Mr Rattray said the European Union had become the world’s biggest dairy exporter and would continue to draw away from New Zealand in second place.

The EU is expected to dominate world dairy trade by 2023, with more than

3.1 billion tonnes of product shipped. New Zealand is forecast to export 2.9 million tonnes of dairy products, followed by the US on just more than 1.8 million tonnes.

Mr Rattray said it was an inopportune time for Australian milk production to remain flat or decline, with Gira’s forecasts showing an extra six billion litres a year of milk was required by 2023 to meet global growth outside dairy giants India and Pakistan.

“In the next five years, the traded world will consume 31.5 billion litres more milk – or a bit more than three times Australia’s current production.”