Australian milk industry fights back after deregulation

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Milk sales in Australia's supermarkets have dropped but production
is increasing, according to the Australian Dairy Corporation (ADC).

Milk sales in Australia's supermarkets have dropped but production is increasing, according to the Australian Dairy Corporation (ADC).

In a review of industry sales, the corporation said total supermarket milk sales were down 2.4 per cent in the year to November, driven by a 15 per cent drop in UHT milk, reports IndustrySearch.com.

Fresh milk sales were largely unchanged, with a drop in sales in South Australia and NSW made up by increases in the other states.Supermarket sales of cheese dropped 3.1 per cent, but a 5.2 per cent increase in prices more than offset any fall in farmer income.And in a sign of the industry's rebound from deregulation, milk production climbed 2.9 per cent in November to 1,200 million litres.Total production for the five months to November was up 0.7 per cent to 5,100 million litres.

The story reports that ADC managing director Sandy Murdoch said the improvement in milk sales and production showed the industry had turned the corner since deregulation.

"The Australian industry has come through the deregulation process and is in better shape now than the doomsayers would have had us believe this time last year,"​ he said.Murdoch said despite the weaker world economy, the low Australian dollar and domestic efficiency would ensure another good season for milk producers. He also suggested that Australian producers would be even better off if reforms to world milk trade were pushed through.

"The liberalisation of international trade restrictions will also clearly work in the Australian dairy industry's favour, even if these reforms take some time to filter through from intention to reality,"​ he said.

Related topics: Markets, Fresh Milk