Upstream, each industry continues to see a trend toward fewer farmers, reflected in a growth in the average size of operations, as well as efficiency levels. New developments in technology and farm infrastructure also continue to impact the nature of dairy farming. At the same time, factors such as input prices and labour availability continue to be challenges.
"The Australian dairy industry has been through a period of change and volatility in recent years.”
On a broader scale, the dairy production sector has had to face the challenges of growing global competition, particularly from Europe and New Zealand, in a global market which is arguably the most commoditised of any of the major agriculture sectors. Despite this, the potential for dairy processors or even countries to specialise their products or pursue new innovations is better than ever.
In the Australian dairy industry the challenges for producers vary widely by region, particularly due to climatic differences, or the size of regional industry clusters – dairy farming in southern Queensland or Western Victoria are quite different propositions.
Fundamentally however, the vital factor of the consumption outlook remains very strong. Domestically, while Australia’s population continues to grow, consumer behaviour is increasingly driven by health perceptions. Non-animal dairy products will undoubtedly grow but mainstream dairy products will always form a major part of a healthy diet. For export markets, there is still enormous growth ahead in the middle class populations of Asia, particularly China.