DAIRY Inspire was the name of the event but cautious optimism about the dairy industry’s future was the theme of some of the speakers who addressed the Camperdown event on Wednesday.
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Rabobank dairy industry analyst Michael Harvey told the 100 people at the WestVic Dairy-organised event he was cautious about milk processors getting a closing price of $6/kilogram milk solids farmgate price for this season but if it fell to $5.60 it might still be marginally profitable for farmers.
Mr Harvey said the drop in dairy commodity prices to their lowest level in 10 years had caught many people “off-guard” but he was confident the “weak” market would recover by the second quarter of next year.
While the fall in dairy commodity prices was due to a drop in demand from the two largest dairy importers, China and Russia, and increased dairy production in the Northern Hemisphere, demand from China was likely to revive and be supplemented by more dairy consumption in others parts of Asia and the Middle East, he said.
Mr Harvey said it was estimated an extra 20 billion litres of milk would be needed to meet world demand by 2020 and western Victorian dairy farmers would play a key part in meeting that growth because they were globally competitive.
In a video presentation, Warrnambool Cheese and Butter (WCB) chairman Lino Saputo Jnr told the Dairy Inspire event he believed there would be “a lot more prosperity” in the dairy industry “within two to five years.”
“Do not lose hope,” Mr Saputo Jnr told producers.
“There will be more consumers than suppliers.
“There are only a handful of countries that can supply dairy solids. Most emerging countries cannot,” Mr Saputo Jnr said.
He also told Dairy Inspire that Saputo’s $500 million takeover of WCB in 2014 had turned out to be “everything we dreamed of.”
Mr Saputo Jnr said the takeover was “a love story 12 years in the making” after Saputo first eyed off WCB in 2001-2002.
It launched its takeover bid in 2013 to fend off a Bega Cheese offer because it wanted an “Australian platform” to supply demand for dairy in emerging markets, he said.
WCB was efficiently processing a billion litres of milk a year from one facility and was in one of Australia’s most prosperous dairying areas, Mr Saputo Jnr said.
