Aust'n dairy farmers urged for more milk to satisfy growing Asian demand

Australian dairy farmers have been urged to ramp up milk production as Asia's dairy demands continue to grow, or face the risk of China looking to Europe to satisfy its needs.

In combination with the recent approval of the China-Australia Free Trade Agreement (ChAFTA), an ANZ paper published on Wednesday has said a lack of resources and understanding of the Asian dairy boom could leave Australia behind European producers when vying for Asian buyers.

The report also signals a potential 15 percent jump in annual Australian milk production if investment structures and growth incentives are put in place.

But to achieve successful expansion into Asian countries such as China, the ANZ's head of agribusiness, Mark Bennett, said Australia's 6,000 dairy farmers needed to obtain more cows and more farmland quickly.

Bennett said it was important that Australia takes any potential opportunities to expand into Asia, especially considering the free trade agreement with China was signed this year.

"We asked what will be the catalyst for producing more milk, and what the answers are for how to get to the 15 billion liters of annual milk production, because the China food boom has gone from sleeping giant to reality, yet it still isn't happening," Bennett told News Corp on Wednesday.

"We are not about forcing farmers to do things, what we have tried to do in this report is look at how we could get to producing 15 billion liters of milk by 2025, or even quicker, and what is needed to achieve that."

The ANZ found that Australia's milk production had slowed from 11 billion liters per year to 9.2 billion liters per year over the past decade, despite recent Asian demands for "clean, green and safe" Australian diary.

The ANZ report said ChAFTA would provide further incentives for farmers to expand operations, under the best scenario, herds could grow from 270 cows per farm up to 825 cows per farm by 2025. Endit