Rural Media South Australia

1
Rural Media South Australia

• Max Roberts, Chairman, Dairy Australia
• 12 May 2009

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International commodity prices
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Australian sales holding volume terms

• Consumers trading down to private label
• response to price hikes
• feeling recessionary nerves
• Competition on house brand contracts
• Volumes should stabilise
• staple food for Australians
• cheaper source of protein than meat
• Price pressure building

4
Issues / wildcards still in play

• Financial
• Australia -
• Other currencies
• When will the credit crunch ease?
• Government
• Stimulus packages
• Protectionism
• Export subsidies
• Government stockpiles
• Renewable energy policies
• ETS
• Dairy Markets
• Weather impacts
• Response to lower farmgate prices
• Strength of underlying demand
• Stock levels refilling the pipeline

5
Supply Outlook - tightening
NZ Aust refer to 2008-09 season
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Opening price challenge

• Forward sales
• Stocks
• Credit
• Supply vs Market

7
Farmgate price in 2009-10
Exchange rate sensitivity Shift from 0.60 to 0.70
USD -/6.5 cpl on farmgate price Bank forecasts
range between 55 and 74 US cents
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Dairy market outlook

• Recovery in demand?
• Buyers cautiously back in the market, securing
  short term needs
• Import recovery at lower prices in SE Asia, China
  Africa
• Food inflationary pressures easing
• Supply response starting
• Weakening commodity prices flow back to farmgate
  prices
• Less milk in US and EU in 2009
• Drought conditions in South America
• Oceania supply critical to market sentiment
• Policy interventions influencing price recovery
• Intervention stocks, export subsidies

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Future

• People
• Technology / Innovation
• Investment
• Sustainability

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Dairy Sustainability - What we do everyday
social
environmental
economic
1
Industry The way we work
5
National The value we bring
Global The challenges addressed
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Future farmer

• ?

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• Thank you