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Australian dairy imports surge as exports stagnate


ALMOST $1.7 billion of dairy imports have washed up on Australian shores in the wake of multiple free-trade agreements, a global glut of dairy products and an ongoing slump in local production.

While Australia dairy exports have stagnated at $3 billion or less for the past 17 years, imports have surged from $337 million in 2000 to almost $1.67 billion last year.

Most of the growth has occurred in the past four years, with Dairy Australia figures showing imports have doubled since 2012, when they were sitting at just $861 million.

The dramatic rise in imports has sparked increasing concerns among Australian dairy farmers that their industry is struggling to remain ­competitive in international markets.

“The dairy industry, as we know it, is at a crossroads,” Finley dairy farmer Laurie Flanagan said. “I think these figures are quite amazing.”

Nullawarre dairy farmer Jason Burleigh said many farmers would be “blown away” by the import figures. “Why are we importing all this?” he said.

HAVE YOUR SAY: Does the dairy industry get a fair deal from free-trade agreements? Tell us below.

Dairy Australia analysis shows US dairy products made up 13 per cent of imports, by value, last year, helped along by the 2005 Australia-United States Free Trade Agreement.

Even the heavily subsidised European Union has managed to muscle into the Australian market, accounting for 31 per cent of imports last year.

And, unsurprisingly, global dairy giant New Zealand poured more than $800 million of dairy products into Australia’s supermarkets, food service industry and fast food outlets.

Cheese imports hit $627 million last year, infant powder $370 million, mixtures $146 million and butter products $144 million, with the rest comprising milk and whey powders, ice cream, condensed milk, lactose and casein.

Dairy Australia senior industry analyst John Droppert said five factors were driving the import surge. These were:

TRADE barriers are lower (more FTAs), and major dairy exporters (US, EU and NZ) are competing to find a home for increasing milk production.

AUSTRALIA has more international investment in dairy manufacturing by big multinationals, so there is much more importing of dairy ingredients.

LOWER milk production since 2001-02 has meant the Australian industry has had to choose where it does business, leading to specialisation and greater focus on some markets (and protection of export markets) over others.

CHEAP imports are being used in the food service sector (for example, more US and NZ cheese into the pizza trade).

DEMAND at the premium end of the market is driving up imports of European cheese.

Meanwhile, Australian dairy exports have remained at about $3 billion since 2000, after peaking at $3.2 billion in 2001.

 

Asked if Australia’s dairy processing sector was losing its competitive advantage, Rabobank senior dairy analyst Michael Harvey said the past 12 months had taken their toll.

“We still think Australian farmers are still competitive in southern Australia,” Mr Harvey said.

“(But) there’s no doubt that farmers have had to cope with a lot of volatility.”

The Australian Dairy Farmers failed to respond to requests for comment on the issue of increased imports.

 

Source: The Weekly Times


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