The Victorian dairy industry, which produces about 86% of national dairy exports, will need to step up production to meet growing world demand — particularly from China, Australia’s fastest-growing cheese export market — at the end of a decade-long drought and two consecutive years of rainfall in key dairy areas.
Victorian Premier Ted Baillieu told The Australian his government wanted to increase exports of dairy products to China, where there were “significant opportunities” for sales.
The value of Victorian dairy exports to China grew by 8% last year to $144 million, and increased demand is expected from the US, where cheese consumption shot up by 11% last year, according to a report by the US Agriculture Department.
The report projects a significant boost in Australian cheese production this year to 385,000 mega-tonnes, up by 14% from last year’s estimated production.
The US predictions are generous, says Joanne Bills, manager for strategy and knowledge at Dairy Australia, which is forecasting a 2% industry-wide production increase this year, down from 4% last year.
Victorian dairy veteran Sandy Cameron, owner of Meredith Dairy Farm, which specializes in goat’s cheese, exports about 5% of his high-end product to the US, and despite the high Australian dollar, he predicts exports will continue to boom.
“Without us doing anything, it will double this year,” Mr Cameron said. “That’s what we’ve forecast.”
The farm’s marketing director, Rugby Wilson, said China’s interest in Australian dairy was “remarkable”.
“We were a bit stunned at the demand in China though we haven’t yet turned it in to a reality,” said Mr Wilson, who has already travelled to China twice this year.
Mr Cameron said the farm was concentrating on establishing a foothold in the US even though the high Australian dollar was inhibiting good profits there.
Meredith cheese exports to the US are tapping into a niche market of boutique delis and wholefoods grocery stores.
Sales of Australian butter to China rose by 83% to $5.6m in the past financial year, cheese rose by 22% to $36.8m, and sales of liquid milk doubled to $7.4m. Total sales of Australian dairy products to China increased by 4.7% to $291m.
Source: The Australian Oct 2012