Australian milk production is forecast to reach 9.9 billion liters in 2014 due to above-average milk prices and increased yields. The industry is recovering from previous adverse weather conditions andcow numbers are expected to reach 1.7 million head this year. Higher domestic and foreign investment in the industry is leading to growing Australian exports of cheese and milk powder, especially to Asia. The signing of free trade agreements (FTAs) with Japan and South Korea has increased access for some dairy products, while FTA talks with China are continuing. Farm
rationalization continues as higher cost producers leave the industry.
