Challenges and Opportunities: Dairy Industry Marketing Report

This report examines the Australian dairy industry, focusing on its current state, challenges, and opportunities. It begins with an executive summary and table of contents, followed by an introduction that highlights the sector's significance and export prominence. The report reviews the Australian dairy industry, noting its diverse product range and the impact of deregulation. It then analyzes the current business scenario, emphasizing declining production due to market demand and weather conditions, while also acknowledging increasing consumer demand and export potential. The report identifies key challenges, including climate change, the impact of global competition, and a lack of innovation. Conversely, it highlights opportunities such as growing export markets, technological advancements, and rising domestic demand. The conclusion synthesizes these findings, asserting that the dairy industry faces significant opportunities despite existing challenges, with innovation and technology playing key roles in future growth and competitiveness. The report references multiple sources to support its analysis.

Running head: FOOD MARKETING
Food marketing
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the challenges and opportunities being faced by the
dairy industry in Australia. Various research and literature were being discussed for the
analyzing and interpreting the current position of this industry. It is been concluded that they are
having huge opportunities in the domestic as well as global market. The industry is going
through an extensive change in terms of innovation and technologies. Thus, the productivity and
effectiveness of the industry is going to increase in future. Certain challenges are there for them,
which should be overcome. Overcoming these challenges and initiation of latest technologies
and innovation will help them to tap the extended opportunities in the market.

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Table of Contents
Introduction......................................................................................................................................3
Review of Australian dairy industry................................................................................................3
Analysis of the current business scenario........................................................................................4
Challenges for the dairy industry.....................................................................................................5
Opportunities for the dairy industry................................................................................................5
Conclusion.......................................................................................................................................6
Reference.........................................................................................................................................7

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Introduction
Animal husbandry is one of the most potential and promising sectors in Australia. Among
the animal husbandry, dairy sector is one of most promising sectors in Australia. Currently
Australia is the third largest dairy exporter in the world (Douphrate et al. 2013). However, there
are various challenges being faced by this industry in the recent time which is adversely affecting
their potentiality. Overcoming these challenges will help to grab the huge opportunities that are
being estimated for the Australian dairy industry.
This report will discuss about the challenges and opportunities being faced by the dairy
industry in Australia. In addition, various research and literature will be discussed for the
analyzing and interpreting the current position of this industry.
Review of Australian dairy industry
According to the research done by Price water Coopers (PWC), more than 50 percent of
the total dairy production in Australia is being exported (PWC.com 2017). Moreover, the dairy
industry in Australia constitute of milk, yoghurt, butter and cheese. Thus, diversified customer
requirement is being met by this industry. Victoria is the Australian state with the largest
production of the dairy products. However, after the deregulation of the dairy industry in 2001,
domestic producers faced the threat of survival due to the entry of various international firms.
According to Dairy Industry Australia, various challenges are being faced by this industry in the
recent time. Due to the reason of seasonal fluctuations and price, it is being estimated that the
national milk production will be decreased by about 7.5 percent (Dairyaustralia.com.au 2017).
According to Nettle, Brightling, and Hope (2013), there is an urgent need of innovation in the

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Australian dairy industry to cope up with the challenges being faced by them. Moreover, the
global dairy industry is going through extensive innovation and Australian diary is no exception
(Robinson 2012).
Analysis of the current business scenario
The current scenario of the dairy industry in Australia is not up to the mark. The
estimated dairy production in this financial year will be the lowest in the last 21 years. It is being
estimated that Australia will produce 8.8 billion lr. Of milk which is quite low compared to the
average trend of dairy production in Australia. Key reason being concluded is the lower market
demand and unfavorable weather condition (Long 2017). Victoria, the largest diary producing
state in Australia has incurred the major reduction of the production by about 18 percent.
However, in the recent time, it is also been seen that the market demand for the dairy products is
rising. The market demand for dairy products got increased by about 2.4 percent in the last year.
Thus, opportunities are there to tap. However, the internal issues in the dairy industry are
reducing the potentiality of this industry.
However, despite these challenges, it is been seen that the dairy farmers are optimistic
about the future potential. According to them, the production will increase gradually in the next
three years. Regarding to the dairy industry of Australia, it is been calculated that approximately
more than 26000 people are being involved with this industry directly and indirectly
(Legendairy.com.au 2017). The total and average milk consumption level of the customers is
also increasing with average milk consumption per consumer per year is 105 litre. The export
potential of the industry is also increasing with the increase in the market size overseas.

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Currently, the export of dairy products constitute of $ 3 billion (Abs.gov.au 2017). Majority of
the dairy products are being exported to China and Japan.
Challenges for the dairy industry
 One of the key challenges that is being identifies is the climatic change. Recent
fluctuations in the climate in the Australian regions are posing threat to the dairy
industry. The generation of the food stock for the animals is facing obstacles due to the
climatic change.
 Deregulation of the diary industry caused entry of different global organizations. this
caused threat to the domestic suppliers due to the reason that the global firms are offering
at much lower prices due to economies of scale.
 Lack of innovation in the Australian dairy industry is further reducing their
competitiveness. Compared to the global industry standard, the dairy industry of
Australia is trailing behind in terms of latest technology and innovation. This is reducing
the effectiveness and productivity of the industry.
 More than 50 percent of the dairy products are being exported. Thus, fluctuations in the
global market will have adverse effect on the domestic dairy industry.
Opportunities for the dairy industry
 The export market of the Australian dairy industry is increasing. The global diary market
is witnessing a positive demand for the dairy products and being the third largest exporter
of dairy in the world, the potentiality of the Australian dairy industry is increasing.

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 Initiation of latest technologies and innovation is increasing the effectiveness of the dairy
industry. It is also providing them the required competitiveness to tap the opportunities in
the global market.
 The domestic demand for the dairy products is increasing in the Australian market.
 The price for the milk is projected to get increased in the following years, which will help
the producers to have more revenue.
 Dairy industry of Australia is becoming more organized which will help them to compete
in the global and domestic market more effectively.
Conclusion
Having discussed the market scenario of the dairy industry in Australia, it can be
concluded that they are having huge opportunities in the domestic as well as global market. The
industry is going through an extensive change in terms of innovation and technologies. Thus, the
productivity and effectiveness of the industry is going to increase in future. However, there are
various challenges that are being faced by the industry which need to be overcome. It is been
analyzed that the dairy market in Australia is already generating a huge revenue from the market.
Few challenges that are being faced by the industry are restricting their growth rate which is
being projected to get solved in the following years. Thus, overcoming the challenges and
initiation of latest technologies and innovation will help them to tap the extended opportunities in
the market.

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Reference
Abs.gov.au. (2017). Year Book Australia, 2004. [online] Available at:
http://www.abs.gov.au/Ausstats/abs@.nsf/0/B006A83A9127B0F5CA256DEA00053965?Open
[Accessed 24 Aug. 2017].
Dairyaustralia.com.au. (2017). Situation and Outlook 2017. [online] Available at:
https://www.dairyaustralia.com.au/industry/dairy-situation-and-outlook/situation-and-outlook-
2017 [Accessed 24 Aug. 2017].
Douphrate, D.I., Hagevoort, G.R., Nonnenmann, M.W., Lunner Kolstrup, C., Reynolds, S.J.,
Jakob, M. and Kinsel, M., 2013. The dairy industry: a brief description of production practices,
trends, and farm characteristics around the world. Journal of agromedicine, 18(3), pp.187-197.
Legendairy.com.au. (2017). Dairy Industry Statistics & Information | Legendairy. [online]
Available at: http://www.legendairy.com.au/dairy-farming/our-industry/industry-stats [Accessed
24 Aug. 2017].
Long, W. (2017). Australian milk production lowest in 21 years. [online] ABC Rural. Available
at: http://www.abc.net.au/news/rural/2017-02-22/australian-milk-production-lowest-in-21-
years/8292426 [Accessed 24 Aug. 2017].
Nettle, R., Brightling, P. and Hope, A., 2013. How programme teams progress agricultural
innovation in the Australian dairy industry. The Journal of Agricultural Education and
Extension, 19(3), pp.271-290.

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PWC.com.au, (2017). [online] Available at:
http://www.pwc.com.au/industry/agribusiness/assets/australian-dairy-industry-nov11.pdf
[Accessed 24 Aug. 2017].
Robinson, R.K., 2012. Modern Dairy Technology: Volume 2 Advances in Milk Products.
Springer Science & Business Media.