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By Sally Dakis
Friday, 17/10/2008
Dairyfarmers have been warned to expect more volatility in dairy prices as a result of the global financial crisis.Dairy commodities have been cut by 20 per cent over the past few months, and Dairy Australia is predicting more uncertainty in the market.Dairy Australia's manager of Strategy and Knowledge Joanne Bills says the crisis is having an impact on some of Australia's key dairy export markets in Asia."Already over the last couple of months commodity prices have dropped quite sharply, around 20 per cent on average, in particular milk powders have been under a fair bit of pressure" she said."We're probably expecting that those prices will continue to be volatile, it's a very tight supply and demand situation still, but we are seeing some signs of demand softening and the possibility that we will have more supply to the world market. So perhaps a bit more weakness in those commodity prices to come".But Ms Bills says Dairy Australia is unable to quantify the magnitude of further falls."It is really difficult to predict at this stage, they have fallen very sharply in the last couple of months, we hope we don't continue to experience falls like that. We feel that there might be some more downward pressure on milk powders because of the activity of the US and the European Union, and the supply that's coming on stream from South America and New Zealand.""We think that butter and cheese has probably got a bit more resilience in terms of pricing for those commodities."In spite of this outlook though, Joanne Bills says dairy farmer confidence in the industry remains strong, with historically high farm gate prices, and farmers adopting a medium to long term outlook in the industry.
In this report: Joanne Bills, Dairy Australia's manager of Strategy and Knowledge
Friday, 17/10/2008
Dairyfarmers have been warned to expect more volatility in dairy prices as a result of the global financial crisis.Dairy commodities have been cut by 20 per cent over the past few months, and Dairy Australia is predicting more uncertainty in the market.Dairy Australia's manager of Strategy and Knowledge Joanne Bills says the crisis is having an impact on some of Australia's key dairy export markets in Asia."Already over the last couple of months commodity prices have dropped quite sharply, around 20 per cent on average, in particular milk powders have been under a fair bit of pressure" she said."We're probably expecting that those prices will continue to be volatile, it's a very tight supply and demand situation still, but we are seeing some signs of demand softening and the possibility that we will have more supply to the world market. So perhaps a bit more weakness in those commodity prices to come".But Ms Bills says Dairy Australia is unable to quantify the magnitude of further falls."It is really difficult to predict at this stage, they have fallen very sharply in the last couple of months, we hope we don't continue to experience falls like that. We feel that there might be some more downward pressure on milk powders because of the activity of the US and the European Union, and the supply that's coming on stream from South America and New Zealand.""We think that butter and cheese has probably got a bit more resilience in terms of pricing for those commodities."In spite of this outlook though, Joanne Bills says dairy farmer confidence in the industry remains strong, with historically high farm gate prices, and farmers adopting a medium to long term outlook in the industry.
In this report: Joanne Bills, Dairy Australia's manager of Strategy and Knowledge
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