Sugar down, but will 2018 be the year dairy farmers bounce back?

Posted by Andrea Hogan on 10th January 2018

The dairy cattle farming industry should bounce back tin 2018 says market research firm IBISWorld.

Following a year of low prices and depressed milk production, IBISWorld said conditions have begun to stabilise while demand for domestic dairy products rises.

“With the Australian dollar projected to depreciate this year, we anticipate local dairy products will become more competitive in export markets, boosting returns to domestic milk processors, which will then flow through to dairy cattle farmers,” said IBISWorld Senior Industry Analyst, William McGregor.

“We’re also expecting an increase in the size of the national dairy cattle herd, which will drive up milk volumes, and contribute to an expected 8.0 per cent increase in revenue in 2017-18.”

Things not so sweet for sugar manufacturers

Although it is expected to be a better year for dairy farmers, IBISWorld says a global oversupply in sugar is predicted for 2018, driving prices down.

“Domestic sugar output is projected to decline this year following the bumper crops of 2016-17, and with two-thirds of Australian sugar destined for export markets, global conditions – including consumption not matching production growth – will contribute to revenue declines for local sugar millers,” McGregor said.

Pressure on pulses

The value of vegetables grown in 2018 is predicted to slightly increase due to a strong potato and onion output. The industry’s overall performance is however expected to dip with revenue forecast to decline by 13.5 per cent because of a likely drop in pulse production.

Record pulse output in 2016-17 means that although 2018’s production is still projected to be high, revenue will decline with lower yields hurting pulse growers’ revenue.


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