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Industry confidence spurs expansion plans for Australian dairy farmers

June 1, 2021
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Why this is important to Wisconsin businesses: Wisconsin exporters with expertise in dairy farming equipment, dairy processing machinery and irrigation systems may find export opportunities as Australian dairy farmers invest in their operations.

With profits on the rise, dairy farmers in Australia are optimistic and are pumping some of those profits into additions and improvements to their farms.

Australia’s 5,700 dairy farms are spread across eight unique regions throughout Victoria, South Australia, New South Wales, Queensland, Tasmania and Western Australia.  The average herd consists of 279 cows.

Consumer confidence in dairy products has risen in recent years, and 85% of the Australians surveyed believe dairy represents healthy, wholesome food. The average Australian drinks, on average, 97 liters (about 26 gallons) of milk per year and eats 13.6 kilograms (30 pounds) of cheese, 4 kilograms (8.8 pounds) of butter and 9.5 kilograms (91 pounds) of yogurt every year.

Dairy Australia’s latest manufactured dairy products report said the growth of these consumer appetites resulted in increased production of butter, skim milk powder, buttermilk powder, cheese (especially cheddar) and whey powder in 2020-21.

Farmers are also more confident about their industry. Dairy Australia surveyed 713 farmers and found 80% have a positive outlook for their own business and 80% reported a profit for the 2020-21 fiscal year. Farmers have benefited in the past year from letting their cows graze and relying less on supplemental cattle feed.

This, however, is expected to change over the next 20 years. A team of researchers at the University of Melbourne is predicting that with changing climate conditions, farmers will need to shift the pasture growing season and purchase more feed. Another challenge farmers currently face is an increasing shortage of skilled labor. These two factors have motivated many farmers to make new investments in their businesses to become more efficient and less reliant on individual workers.

In the last two years, 91% of farmers reported making investments in their farms; 27% of the purchases are considered major investments. In the next two years, 88% of farmers say they intend to invest in their farms, and 20% will be major investments.

Farmers across the country have said their priorities are to purchase farm machinery, dairy processing equipment, packaging and irrigation systems. Farms with larger herds of 500 or more are more likely to proceed with higher levels of investment.

With industry confidence on the rise and more dairy farmers motivated to invest in their businesses, the Australian dairy industry is positioned well to offer opportunities for equipment manufacturers in various stages of the supply chain.

Wisconsin exporters are also strongly encouraged to read the full Situation and Outlook Report from Dairy Australia, as well as consult the Dairy Australia website for additional resources.

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