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Rural Media South Australia

Rural Media South Australia. Max Roberts, Chairman, Dairy Australia 12 May 2009. International commodity prices. – Supermarket sales growth by category (6 months to December 2008 ). Australian sales holding – volume terms. Consumers trading down to private label

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Rural Media South Australia

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  1. Rural Media South Australia Max Roberts, Chairman, Dairy Australia 12 May 2009

  2. International commodity prices

  3. – Supermarket sales growth by category (6 months to December 2008 ) 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 • Substitute foods • Input costs – farm margins

  5. Supply Outlook - tightening *NZ & Aust refer to 2008-09 season

  6. 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

  8. 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

  9. Future • People • Technology / Innovation • Investment • Sustainability

  10. Dairy Sustainability - What we do everyday 2 3 Food safety & integrity Dairy Capability Innovation & technology 4 5 6 Climate Environmental stewardship Value add & exports 7 8 9 Human health Food security Regional community social environmental economic 1 Industry: The way we work 5 National: The value we bring Global: The challenges addressed

  11. Future farmer

  12. Thank you

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