There has been substantial growth in yoghurt consumption, which can be attributed to significant product development
Melbourne, Australia (PRWEB) November 22, 2014
Domestic farmgate milk and dairy solids prices for the declined slightly in 2009-10, due to a fall in demand for Butter and Dairy Product Manufacturing industry products amid the global financial crisis. However, these declines did not outweigh the growing strength of Australian dairy manufacturers on the international scene. Strong growth in world demand for dairy products outweighed supply growth, primarily due to supply constraints in some key exporting countries. According to IBISWorld industry analyst Ryan Lin, “These constraints led to significant increases in world dairy prices, easing the tension on the industry brought about by drought conditions.” As a result, IBISWorld expects that industry revenue will grow at an annualised 1.7% over the five years through 2014-15, to reach $4.5 billion. Industry revenue is forecast to decrease by 0.4% in 2014-15 as world dairy prices fall.
The industry has undergone significant change over the past five years. In 2014-15, global dairy prices are expected to fall slightly as seasonal price fluctuations smooth out and volatility falls. The industry is expected to focus on expanding its product range to make inroads into new markets, particularly developing markets in Asia and the Middle East. “There has been substantial growth in yoghurt consumption, which can be attributed to significant product development both domestically and internationally,” says Lin. Over the five years through 2019-20, revenue is forecast to increase as dairy farmers capitalise on new growth opportunities, a recovering world economy and sustainable conditions. IBISWorld expects organic increases in milk production volumes and production capacity due to more efficient dairy herds. However, some easing in world dairy prices is expected to dampen growth. Prices received by Australian dairy manufacturers will be affected by the depreciation of the Australian dollar over the next five years, which is likely to drive international demand for domestic dairy products.
The Butter and Dairy Product Manufacturing industry has three major players: Fonterra, Murray Goulburn and Lion. It also includes a number of smaller but significant players such as Warrnambool Cheese and Butter, and Tatura Milk. The moderate level of concentration in the industry reflects the typical trend of concentration in dairy manufacturing. The most recent substantial increase in concentration in dairy manufacturing followed the acquisition of Dairy Farmers by Lion in 2008. However, that did not fully translate into an increase in concentration for the Butter and Dairy Product Manufacturing industry as the industry's broad range of products differs to dairy farmers' production focus, with dairy farmers mainly producing milk, cream and cheese products. Over the next five years, IBISWorld expects that market share concentration will rise as the major players continue to expand.
For more information, visit IBISWorld’s Butter and Dairy Product Manufacturing industry in Australia report page.
Companies in this industry primarily manufacture dairy products other than cheese, ice cream, milk and milk powder. Industry products include butter, yoghurt, condensed milk, evaporated milk and other dairy products.
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