Because of a mix of challenging production conditions, rising input costs, and domestic price wars, the Australian dairy industry has failed to take advantage of the significantly advantageous demographic trends in Asia. The Asian middle class is expected to grow to 1.7 billion people by the end of the decade and to 3 billion people by 2030. Per capita consumption of dairy has increased from 1 liter in 2007 to between 8 and 10 liters today. China is already the world’s largest importer of dairy and it is expected to double its intake by 2020. New Zealand controls 35% of the world’s dairy trade largely through its dairy conglomerate Fonterra, as opposed to Australia’s largely fragmented dairy industry. Australian average farm cash incomes have fallen 33% to $95,300 and the number of farmers planning to invest in their operations has fallen 10% to 28%. Australian annual milk production has fallen to approximately 9.3 billion liters at the same time that demand from China has increased 22%. To read more:
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