AUSTRALIA-DAIRY FARMERS CRISIS.
Australian dairy farmers have been warned they should take ABARE’s grim predictions for their industry with an air of caution as extreme volatility and abnormal market pressures make current price forecasting almost an impossibility.
The warning follows ABARE projecting farm gate milk prices to slump to 33.9 cents a litre for the next financial year and remain on downward spiral until 2012-14, when prices are tipped at 31.1c/l.
This forecast comes after milk prices crashed from 50.6c/l in 2007-08 (in 2008-09 US dollars) to 40c/l in the last financial year, due largely to global financial pressure impairing demand and the significant rise in global stocks placing pressure on world prices.
Chairman of the Australian Dairy Industry Council, Allan Burgess, said forecasting under current conditions was almost impossible, sighting parameters being confused by global financial crisis, and because only 8-10pc of dairy production was traded, relatively small variations in supply and demand could result in disproportional large swings in prices.
But Mr Burgess accepted a further downturn in prices was likely, but "what level and how long" was the question.
