Dairy Markets

As the volume of Australian milk production continues to expand at a faster rate than domestic consumption, an increasing proportion is destined for export markets. Australia now exports more than half of its annual milk production.

While Australia accounts for an estimated 2% of world milk production, it is an important exporter of dairy products. Indeed, Australia ranks third in terms of world dairy trade, accounting for 17% of all dairy product exports.

Japan is the single most important export market for Australia - accounting for more than 15% of Australia 's exports by value. Australian exports are concentrated in Asia/East Asia – making up 65% of the total value of A$2.5 billion.

This reflects bot Australia's natural geographic advantage in these markets and the extent to which Australia is excluded from other major markets by direct restrictions (as in the case of the EU and US) or by the impact of export subsidy programs of major competitor countries.

Nevertheless, the Asian markets have considerable potential for consumption growth as incomes rise and diets become more ‘westernised'. Australian dairy companied have proven track record in supplying these markets over the past decade. The Middle East and Americans are also important markets for many products.

Australia 's top five export markets by volume in 2002/03 were Japan , Philippines , Singapore , Malaysia and Indonesia ; while the top five export markets by value were slightly different in Japan , Philippines , Malaysia , Saudi Arabia and Taiwan .