Syngenta UK
Farminguk
01 September 2016 | Online since 2003
Auto Trader Ltd


14 April 2014 11:12:04 |Dairy,Finance,News

Australian dairy 'offers best risk returns in global agriculture'


Australian dairy currently offers the highest risk-adjusted return of any sector in global agriculture, according to Aquila Capital.
Surging global demand, especially from Australia’s regional neighbours in southeast and eastern Asia, means Australian dairy now offers internal rates of return of between 11-16% per annum.
The Australia Bureau of Agriculture and Resource Economics and Sciences forecasts that milk prices will at least remain unchanged over the next four years at 50 Australian cents per litre, but could head up to 52.5 cents per litre between 2018/2019.
In a scenario of this kind, investors in Australian dairy farms can expect to generate higher returns, with an Internal Rate of Return (IRR) of up to 16 percent p.a. possible. Even if milk prices were at the conservative estimate of 41.5 Australian cents, Australian dairy farms could generate an IRR of 11% from recapitalization and farm improvements, says Detlef Schoen, Group Head of Farm Investments at Aquila Capital.
Detlef Schoen commented: “The acceleration in demand has already caused the spread between supply and demand for dairy products to widen in recent years and this development is expected to continue. The OECD forecasts growth rates for milk and dairy products from emerging markets of between 1.6%-2.8%,1 which might lead to a potential demand overhang for dairy products of as much as five billion litres by 2020.
“Australia is very well placed to benefit from the increasing demand, exporting 50% of its domestically-produced dairy products.”
Dairy Australia, the national services body for the dairy industry expects production of all domestic dairy products to climb up to 2% in the 2013/14 season to more than nine million tons.

Download

1 Comment

loginuserlogo
Name

Please enter your name


Email

Please enter your email

Please enter valid email


Comment

Please enter your comment


Post Comment

Your comment has been submitted successfully. Please wait for admin approval.


Comments


New Zealand | 31 August 2016
Agribusiness: Managing risk key to dairy farming future

Few industries generate as much discussion or concern in New Zealand as dairy farming. Currently, there is much discussion about the high levels of dairy debt. Those with long memories will know th...


USA | 31 August 2016
Farmworker overtime bill is another factor in agricultural evolution

Everyone knows about the California Gold Rush – the massive migration of fortune seekers to the hills of the former Spanish colony in the 1840s and 1850s. During the same period, however, there was...


Australia | 31 August 2016
Cattle exporter misses prospectus targets

Live cattle exporter Wellard Group has missed its prospectus forecasts on revenue, profit and margins, booking a $23 million annual loss instead of the forecast $9 million net profit. Stripping out...


USA | 31 August 2016
The future of agriculture could rest with self driving tractors

With all the talk of autonomous cars from Tesla’s master plan to take on Uber to the legacy automotive players like Ford and Audi pursuing the self-driving agenda, there’s little talk on self-driving ...


New Zealand | 31 August 2016
Stolen herd of dairy cows would cost at least $1m

The theft of 500 dairy cows worth $1 million is no joke and if it had been a bank robbed of this amount there would be a big fuss, says Federated Farmers. Dairy chairman Andrew Hoggard said the the...



Trending Now

Viewed
Discussed


Top stories you may have missed
FarmingUK
FarmingUK Logo

FarmingUK

A new survey has revealed that the vast majority of British consumers belie...


FarmingUK
FarmingUK Logo

FarmingUK

The British public are overwhelmingly in favour of keeping or strengthening...


FarmingUK
FarmingUK Logo

FarmingUK

The sustained recovery of pig prices since the spring has come at a time wh...


FarmingUK
FarmingUK Logo

FarmingUK

A World Trade Organisation (WTO) panel has declared the Russian import ban ...


FarmingUK
FarmingUK Logo

FarmingUK

A new study has linked oilseed rape crops grown from neonicotinoid-treated ...


FarmingUK
FarmingUK Logo

FarmingUK

Philip Hammond is to guarantee billions of pounds of UK government investme...


FarmingUK
FarmingUK Logo

FarmingUK

Access to the foreign labour market is 'critical', according the chief exec...


FarmingUK
FarmingUK Logo

FarmingUK

The Tenant Farmers Association has said the National Trust's vision for a p...


FarmingUK
FarmingUK Logo

FarmingUK

Ulster farmers will 'not lie down and wave the white flag' when Brexit nego...


FarmingUK
FarmingUK Logo

FarmingUK

The cost of rural crime to the UK economy costs £42.5 million a year, accor...


closeicon
Username
Password