I went to a dairyfarmers meeting in Mount Gambier today. It was like being home again, back in Gippsland when I was a reporter for “Stock and Land”.
There are 70 or so dairy farms in the South East of South Australia, so it’s not a dominant industry, but one that is certainly significant.
As a rural reporter I always found dairyfarmers the best to work with. They were progressive, pragmatic, younger than others, media savvy and communicative.
Some of the issues have changed from 18 years ago and some are the same. Milk prices and water supply are always topical.
There was a presentation today from a Dairy Australia guru on the outlook for world and domestic markets.
In summary, world prices will remain high because of increasing demand and reduced supply. Farmers face increased costs though, especially for fuel and grain.
The debate in America about coarse grains is interesting, whether they should be used as stock feed or biofuel. The price is more than double for biofuel apparently, hence the debate.
Back to Australia, there is resistance from shoppers to the rising prices for dairy products.
“Demand on the local market is being pulled back by higher prices. Consumers are being squeezed.”
Cheese prices have risen 15 percent and milk 12 percent while the current inflation rate is officially 4.3 percent. As values go up the volumes go down.
There has been negative volume growth for cheese. Milk is much less sensitive to price increases and butter is holding.
Experts expect milk volumes to continue to grow, but research shows consumers are trading down from brands to private labels; from modified milk to whole milk.
That’s true from my family’s perspective. We nearly always buy home-brand milk and we select the cheapest cheese, regardless of brand.
