Australian Dairy Industry: At an Important Juncture

The Australian dairy industry is at an important juncture as it stands on a sound footing and looks to reboot growth in the industry. The combination of favourable seasonal conditions, high farmgate pricing, and a shift in the balance of power within the supply chain underpins the industry’s turnaround.

Report summary

Rabobank expects Australia’s dairy industry to provide profitable capital investment opportunities for farm businesses over the next decade. While a transformational lift in profitability is not expected, there is a compelling case that the industry may outperform the previous decade in terms of EBIT performance. Investing for growth will not be the right strategy for every farm business, but for enterprises willing to invest, a well-structured plan and consideration of capital at risk is required. Moreover, on-farm investments will need to be both profitable and environmentally sustainable, as reductions in supply chain emissions are needed over the next decade (and beyond).