Australian Dairy Industry In Focus 2009 - Dairying For Tomorrow

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Figure 14 Drinking and manufacturing milk production (million litres) Milk for manufacturing Drinking milk 12,000 10,000 8,000 Million litres 6,000 4,000 2,000 0 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09(p) Source: Dairy manufacturers Figure 15 Milk Production – shares by state, 2008/09 Drinking milk Milk for manufacturing NSW VIC QLD SA WA TAS AUST 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Dairy manufacturers 20 Australian Dairy Industry In Focus 2009
Dairy manufacturing As in the farm sector, the milk processing sector is undergoing continuing rationalisation. This has resulted in improved factory capacity, as larger operations have improved their efficiency and economies of scale. The lack of growth in milk production over the past six years has relieved the pressure on Australian dairy companies to continue to invest in increasing processing capacity – at least in the short to medium term. Instead, the challenge has been to remove surplus capacity and to utilise the existing capacity as profitably as possible. The Australian dairy manufacturing sector is quite diverse and includes farmerowned co-operatives, public, private and multi-national companies. Co-operatives no longer dominate the industry and now account for approximately 40% of Australia’s milk production. The largest is Murray Goulburn, accounting for some 35% of national milk output. Smaller regional co-operatives include Challenge Dairies, Norco and Hastings Valley. Other Australian dairy companies cover a diverse range of markets and products, from the publicly listed Warrnambool Cheese and Butter Factory to the privately owned Bega Cheese Limited, Tatura Milk Industries, Regal Cream and Burra Foods, to name a few, together with many highly specialised cheese manufacturers. Major multi-national dairy companies have operated in the Australian dairy industry for many years and currently include Fonterra, Kirin and Parmalat. The major rationalisation event during 2008/09 was National Foods’ purchase of the Dairy Farmers Group in late-2008, which had significant implications for the domestic market. The ACCC – Australia’s national competition body – required divestiture of certain assets to ensure the state drinking milk markets remained competitive before giving approval for the takeover to proceed. The major manufactured product streams are: • drinking milk – fresh and UHT long-life; • skim milk powder (SMP)/ buttermilk powder (BMP)/butter; • butter/casein; • cheese; • wholemilk powder (WMP); • other consumer products, such as yogurts, custards and dairy desserts; and • specialised ingredients, such as whey proteins, nutraceuticals, etc. Cheese is consistently the major product stream; utilising about one third of Australia’s milk production in 2008/09. This is slightly down on recent years. Skim milk powder/butter production was the next biggest user of milk; taking a quarter of all milk last year. Around 60% of manufactured product (in milk equivalent terms) is exported and the remaining 40% is sold on the Australian market. This contrasts with drinking milk, where some 97% is consumed in the domestic market. See Appendix 3 for more details on the manufacturing processes. Figure 16 The utilisation of Australian milk in 2008/09 Cheese 33% Drinking milk 24% WMP 12% Casein/butter 4% SMP/butter 25% Other 2% Source: Dairy Australia Australian Dairy Industry In Focus 2009 21
Page 1 and 2: Australian Dairy Industry In Focus
Page 3 and 4: Contents Foreword .................
Page 5 and 6: Dairy 2009: Situation & Outlook Bac
Page 7 and 8: What did farmers say in September 2
Page 9 and 10: Withdrawing stimulus too early coul
Page 11 and 12: The Australian dairy industry An im
Page 13 and 14: Farm facts Australia’s climate an
Page 15 and 16: y factors such as product and marke
Page 17 and 18: Australian dollar has lowered local
Page 19 and 20: Milk production While farm numbers
Page 21: Cows’ milk consists of solids (mi
Page 25 and 26: to which Australia is excluded from
Page 27 and 28: Drinking milk Regular or wholemilk
Page 29 and 30: Cheese Australia produced 342,000 t
Page 31 and 32: Fresh and frozen dairy products Aus
Page 33 and 34: outlets account for only a small pe
Page 35 and 36: Industry organisations and structur
Page 37 and 38: Australian Dairy Industry Council T
Page 39 and 40: Appendices 1. Regions 38 2. Milk pr
Page 41 and 42: Appendix 2 - Milk production Figure
Page 43 and 44: curd and whey. The curd is cut, hea
Page 45 and 46: Appendix 4 - Supermarket sales Milk
Page 47 and 48: Tablespreads Table A11 Supermarket
Page 49 and 50: Table A15 Australian exports of who
Page 51 and 52: Table A18 Australian exports of but
Page 53 and 54: Appendix 6 - Imports Table A22 Impo
Page 56: Dairy Australia ABN 60 105 227 987

Australian Dairy Industry In Focus 2009 - Dairying For Tomorrow

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