Skip to content
ednews-logo
ednews-logo

ESP – MEX – ENG – BRA – IND

6 Jun 2025
Ingresar
Crear Cuenta

ESP – MEX – ENG – BRA – IND

6 Jun 2025
Ingresar
Crear Cuenta
  • Day Topics |
  • Dairy trade
  • - Dairy farmers
  • - Organic
  • - Farmers
  • - Dairy farm
Suscríbete al Newsletter
  • Australia
  • Dec 29, 2019

Dairy | Australian dairy: The M&A story for 2020

Amidst battery minerals and fintech stocks, Australia and New Zealand's dairy companies have become the cream of the crop, maintaining steady growth.
Colin Thompson says dairy farmers can't help but feel that Australian retailers, politicians and consumers don't value their industry.
  • Edited by: Damián Morais
  • Themarketherald
  • Elisha Hammond

Canterbury family turning dairy farming model on its head

See also:

Canterbury family turning dairy farming model on its head

 

But is this pattern of global growth likely to extend beyond 2020? It’s the question on everyone’s lips as this year’s prize cash cow enters a period of geopolitical volatility.
Over the next 12 months, Australia’s dairy producers will see slight uptakes in commodity prices, but this will do little to offset rising production costs and difficulties faced by local farmers. Even as demand is forecast to remain robust in the coming years, analysts say global producers could become constrained by the supply market.
As China’s economic boom begins to slow, some say the Aussie dairy sector could be left crying over spilt milk.
The surge in Chinese milk-powder imports
In 2008, China was rattled by an epidemic that affected over 300,000 infants. The culprit was melamine; a chemical compound used in fertilisers and plastic production that was used as an additive in the country’s homegrown baby formula products.
Eleven years later, trust in Chinese-brand infant formula has failed to return, with consumers continuing to look internationally for milk-powder suppliers. The scandal was the catalyst for a rise in imports, setting up global dairy players to meet growing demands.
Australian dairy1Source: Quartz, Dairy Association of China, 2018

Key dairy players

Following the scare, Australian and New Zealand companies emerged as key suppliers of powdered milk and infant formula to China.
According to Dairy Australia, our homegrown producers manufacture two per cent of the world’s dairy, but end up accounting for six per cent of the global supply.
Australian dairy2
Large-cap A2 Milk (ASX:A2M) brought in A$1.2 billion in revenue over FY19, up a staggering 41 per cent on the previous financial year’s figures. The company also recorded a 47 per cent increase in profits from FY18, and analysts say this growth is set to continue. A2M is poised to build on its forecast annual earnings by 14.6 per cent across the next three years as it responds to Chinese demand.
The major Australasian dairy company isn’t the only producer making waves, with Bellamy’s Australia (ASX:BAL) stocks tacking on substantial gains during this year’s third quarter. At the beginning of September, BAL’s share price was listed at A$7.77 but surged to A$13.03 within a fortnight after accepting a A$1.5 billion buy out from Chinese dairy company Meinghu.
Despite acquiring contracts with Eastern players over the last 12 months, shares in Bubs Australia (ASX:BUB) have barely budged. Analysts attribute this to a hunger for expansion in a period of volatility, with prevailing uncertainty over the dairy sector’s impending roadblocks. Only time will tell if Bubs has bitten off more than it can chew, though forecasters say the company could overcome obstacles become profitable over the next three years.
The long road ahead
But even as large caps enjoyed steady gains, these figures diminish against the landscape of last year’s returns.
In 2018, many of these conglomerates averaged 170 per cent growth; nowadays, these companies have tumbled 20 per cent in the year-on-year stats. Smaller companies are failing to fare much better — out of the 17 ASX-listed companies with exposure to dairy, just seven recorded a profit in FY19, and these are predominantly conglomerates who maintain a large slice in the dairy sector pie.
 
“The outlook for FY20 remains tough. Falling milk supply and excess manufacturing capacity is continuing to cause fierce competition for milk and is seeing dairy manufacturers once again offer a farmgate milk price well in excess of what it should be under more normal circumstances,” says Morgans senior analyst Belinda Moore.
 
 

Will Chinese demand slow?

Australian dairy3
 
In 2019’s second quarter, China reported its lowest GDP growth figures in 30 years. As one of the world’s largest economies begins to slow, trade volatility with the U.S. has created uncertainty over China’s future dairy demands.
“China is the world’s biggest dairy importer and home to the largest group of participants on the dairy auction platform,” says New Zealand bank ASB senior rural economist Nathan Penny.
“[China’s] growth has been slowing over 2019 and the purchasing power of its currency has also weakened recently … nonetheless, the Chinese household sector and its food purchases are faring better than other parts of the economy,” Nathan continued.
“The relative strength of the Chinese household sector appears one key factor underpinning dairy prices,” he concluded.

Milk price

See also:

Milk price: Do you know your ABC?

Aussie farmers get A$8.60 kgMS as opening milk price

Look also

Aussie farmers get A$8.60/kgMS as opening milk price

You may be interested in

Trade has to inform defence deals in Asia

Aussie farmers get A$8.60/kgMS as opening milk price

Fonterra announces record new season forecast for organic suppliers

  • Topics |
  • Dairy, Global Dairy Platform, Nathan Penny
Legal Notice

Legal notice about Intellectual Property in digital contents. All information contained in these pages that is NOT owned by eDairy News and is NOT considered “public domain” by legal regulations, are registered trademarks of their respective owners and recognized by our company as such. The publication on the eDairy News website is made for the purpose of gathering information, respecting the rules contained in the Berne Convention for the Protection of Literary and Artistic Works; in Law 11.723 and other applicable rules. Any claim arising from the information contained in the eDairy News website shall be subject to the jurisdiction of the Ordinary Courts of the First Judicial District of the Province of Córdoba, Argentina, with seat in the City of Córdoba, excluding any other jurisdiction, including the Federal.

Related
notes

Aussie farmers get A$8.60 kgMS as opening milk price
Australia

Aussie farmers get A$8.60/kgMS as opening milk price

Analysis of Australian dairy farmgate prices How a Perth petrol strategy played a role
Australia

Analysis of Australian dairy farmgate prices: How a Perth petrol strategy played a role

Dairy farmers disappointed with new farm gate prices as drought, floods add financial pressure
Australia

Dairy farmers disappointed with new farm gate prices as drought, floods add financial pressure

BUY & SELL DAIRY PRODUCTOS IN

eDairyMarket

Latest News

Analysis of Australian dairy farmgate prices How a Perth petrol strategy played a role
Australia

Analysis of Australian dairy farmgate prices: How a Perth petrol strategy played a role

Dairy shortages, no ifs or buts Milk and butter prices to rise as farmers tread water
Australia

‘Dairy shortages, no ifs or buts’: Milk and butter prices to rise as farmers tread water

Dairy Situation & Outlook report
Australia

Dairy Situation & Outlook report – Mid-Year 2025

The power of dairy passion
Australia

The power of dairy passion

Dairy giants avoid Australian tax bill Fonterra, Lactalis, Saputo and Bega
Australia

Dairy giants avoid Australian tax bill: Fonterra, Lactalis, Saputo and Bega

Featured

New Zealand

China

China boosts birth rate with subsidies: a turning point for the global dairy industry?

  • By Valeria Hamann

Featured

Regulatory

Regulatory uncertainty and its impact on investment

  • By Valeria Hamann

Featured

China

Birth Subsidies in China: A New Boost for the Dairy Industry?

  • By Valeria Hamann

Featured

The return of butter is not just about nutrition; it's also about aesthetics and culture.

Butter: A Story of Tradition and Reinvention

  • By Valeria Hamann

Argentina

Milei

Milei Shakes Up Mercosur: Repercussions for the Regional Dairy Market

  • By Valeria Hamann

Featured

Danone

Companies Are Changing the Game: Danone Revolutionizes Nutritional Approach

  • By Valeria Hamann
View all

Join to

Most Read

1.

2.

3.

4.

5.

‘Dairy shortages, no ifs or buts’: Milk and butter prices to rise as farmers tread water

Update: Tariffs temporarily reinstated after court blocks Trump’s ’emergency’ tariffs

Over 1,000 dairy worker Teamsters vote to authorize strike in Colorado, California, other states

Dairy Farmers of Canada: By farmers, for farmers: Spotlight on the Canadian Podcow and Entre deux traites

Proposed bill aims to limit big dairy farms in NY

News by State

  • Argentina
  • Australia
  • Belgium
  • Brazil
  • Canada
  • Chile
  • China
  • Countries
  • Europe
  • France
  • Germany
  • Hong Kong
  • Indonesian
  • Ireland
  • Israel
  • Italy
  • Japan
  • Kenia
  • South Korea
  • Mexico
  • Mongolia
  • Morocco
  • Netherlands
  • New Zealand
  • Northern Ireland
  • Pakistan
  • Poland
  • Qatar
  • Russia
  • Saudi Arabia
  • Scotland
  • Singapore
  • Spain
  • Tasmania
  • Uganda
  • United Kingdom
  • United States
  • Uruguay
United Kingdom

Will UK dairy farmers lose in US trade deal?

United States

Third generation dairy farmer says support from Asheville and surrounding areas is vital

World

eDairy News Spanish

Fernglen Farm's sheep dairy addition

Fernglen Farm’s sheep dairy addition

View all

eDairy News PORTUGUESE

Trade has to inform defence deals in Asia

Trade has to inform defence deals in Asia

View all
  • Day Topics |
  • Dairy trade
  • - Dairy farmers
  • - Organic
  • - Farmers
  • - Dairy farm
Digite
Cadastre-se

The most visited dairy news website in the world.

  • Team
  • Company
  • Terms and Conditions
  • Privacy Policy
  • Team
  • Company
  • Terms and Conditions
  • Privacy Policy

info@edairynews.com

+54 9 3463 64-7989

3503 NW 64 CT, Coconut Creek,

33073, Florida. Estados Unidos.

 

Envelope Whatsapp Facebook-f X-twitter Linkedin-in Instagram Youtube
Advertise - MEDIA KIT Advertising.
6 June, 2025
  • Day Topics |
  • Dairy trade
  • - Dairy farmers
  • - Organic
  • - Farmers
  • - Dairy farm
  • Team
  • Company
  • Terms and Conditions
  • Privacy Policy
  • Team
  • Company
  • Terms and Conditions
  • Privacy Policy
Suscribe to Newsletter

Follow us

Facebook-f Twitter Linkedin-in

SUBSCRIBE TO OUR NEWSLETTER