Friday, March 29, 2024

Looking out for larger volumes

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Russia is emerging as a big source of demand for dairy products, Gary Helou, chief executive of Australian dairy co-operative, Murray Goulburn, says.
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He told the Australian Dairy Conference in Geelong in late February there had been a 10-fold increase in inquiry from that country over the past six to 12 months.

The ongoing friction between Russia and western Europe meant it was looking outwards for milk products after a 6% decline in its own production.

“We are in quite a unique phase in the industry right across the world,” he said.

“We can get on a new road map to move away from the dormancy of a couple of years ago.”

The dairy industry had never seen prices escalate and stay up as they had because of excessive demand and limited supply.  GlobalDairyTrade prices were 50% higher than they had been at this time last year. The Middle East was a great hunting ground for dairy companies who were also involved in building interesting alliances in China.

“The gambles that are being played out are defining the battlefield,” he said.

“Asia will be the growth engine for many years to come. This opportunity is on our doorstep and we need to crystallise it by doing meaningful things. We don’t want to conquer the world, just bits of Asia and the Middle East.”

Australian dairy companies hadn’t made the massive investments which other international players had, Helou said.

“We need to make that investment in markets as well as at home so our products are world class.”

Scale was very important and Murray Goulburn was absolutely focused on growing milk pools for export.

While Australian milk supply was down 3% in the first six months of the year, Murray Goulburn’s milkflows were up 3%, compared with New Zealand’s lifting by 4%.

United States’ milk supply had increased 2% in 2013, its highest production since 2006, with the growth all exported.

The same situation had occurred with the growth in milk production from European Union dairy producers Ireland, Scandinavia and Germany.

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