Butter and Dairy Product Manufacturing in Australia Industry Market Research Report Now Updated by IBISWorld

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Strong growth in world demand for dairy products has outweighed supply growth over the past five years. For this reason, industry research firm IBISWorld has updated its report on the Butter and Dairy Product Manufacturing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

There has been substantial growth in yoghurt consumption, which can be attributed to significant product development

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.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
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