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International Competitiveness of Southern Hemisphere Dairy Businesses

Presentation to 1st International Seminar – Ecuador, March 2019

“Designing Profitable Dairy Businesses for the Next Decade”

By David Beca

BACKGROUND

This was initially developed for a presentation to the Victorian (Australia) Stock Feed Manufacturers Dairy Forum in June 2017. It was subsequently developed further for presentations in Uruguay, Argentina, South Africa and Tasmania (Australia), before further development for this Ecuador seminar.

PRESENTATION OUTLINE

This presentation covers the following areas:

SHORT SUMMARY

An initial review of growth in annual milk supply shows that the New Zealand and South African dairy industries have been consistently growing over the last 17 years, while the Australian, Argentinian and Uruguayan industries have effectively stopped growing at some point.

When milk price is reviewed over this period, it is clear that this has not been a relevant factor for the absence of growth in Australia, Argentina & Uruguay. However, the impact of rapidly growing volumes of exports from United States, and rapidly growing imports by China from 2008, are impacting on comparative international milk prices.

When Australia (represented by Victoria) is compared to New Zealand over the last 15 years, then it is Australia’s much larger increases in cost of production which can be identified as the primary problem, with this being impacted by the more significant changes to farm production systems in Australia.

Argentina & Uruguay appear to be following a similar trend to Australia. Although Tasmania (Australia) is in a significantly better position than Victoria (Australia), the same trends in loss of profitability are occurring.

The presentation then looks at what might need to change for these trends to be reversed, including what might be learnt from South Africa, which was in a similar position in the 1990’s but then made some significant changes to recover their profitability.

To view the full presentation in English please click here.

To view the full presentation in Spanish please click here.

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