Future For Dairy Industry Lies Overseas

Future For Dairy Industry Lies Overseas

DAIRY companies had failed to invest in technology and had not tried hard enough to profit from international Murray Goulburn chief Gary Helou yesterday.

He told the Great South Coast Food Summit in Warrnambool that the industry was being driven by overseas markets but today’s dairy companies were the result of corporate thinking 10-20 years ago.

The time for processors to focus principally on the domestic market was over, Mr Helou said.

“We are now driven by Asia, the Middle East and North Africa. That is a mindset that has to happen,” he said.

Mr Helou said world demand for dairy products was set to grow at six per cent a year, fuelled by the growing middle class in Asia, but supply would increase by no more than two per cent annually.

“The growth numbers are scary. The dilemma that farmers face and the food industry faces is how is it that we have struggling farmers?”

Mr Helou said Australian farmers in general were good operators and low-cost producers but the lack of focus on international opportunities had reduced their returns.

Mr Helou was one of dozens of speakers at the summit, which aims to develop a regional plan involving all sectors of the food industry supply chain to target international market opportunities during the next 10-15 years.

Asked why Australian milk production was declining in the face of increasing demand, Mr Helou said the answer clearly was the farm gate price paid to farmers for milk. “Horrendous” seasonal conditions, the high Australian dollar and low commodity prices had all contributed to the low farm gate price but those factors were “coming to an end”, he said.

Higher prices were anticipated based on the strong demand and lack of supply.

Indonesia’s vice-consul in Australia for economic affairs Maradona A. Runtukahu told the summit the anticipated five-fold increase in Indonesia’s middle class over the next 50 years would change food consumption patterns and open up more markets, not only for Australian food but also its expertise.

He said Australia’s trade with Indonesia was “underdone” at present and Australia needed to better understand Asian preferences.

Mr Runtukahu said the opportunities in Asia went beyond the exports of products. He said Indonesia lacked technical knowledge and expertise and he hoped Australia could help Indonesia with value-adding.

Ross Taylor, Chairman of the Indonesia Institute (Inc) said from Perth that Australia had to stop seeing trade as a 'we sell-you buy' relationship.

"The future is in partnerships", Mr Taylor said. "Australia already has a large supply of dairy cattle in East Java and the demand is huge. We have the science, the technology and marketing skills. Indonesia has the land, the labour plus perfect farming conditions with wonderful soil and rainfall. Put all that together and our two countries can do some pretty amazing things by exporting onto third party countries throughout the region.

ENDS

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