Trends in demand

Over the 5 years between 2000/1 to 2005/6, drinking milk has increased from 52 to 57% of total production with further increases expected due to the impact of population growth, as the minerals and energy resources boom in the north of the state drives economic development.

Figure. Milk sales versus milk production in Western Australia.

In addition, the demand for value-added manufactured products has increased such that insufficient milk now exists to meet this demand. While milk production in WA represents less than 4% of Australia’s total production, the demand for milk over the next 5 years at a state level is expected to be an additional 50 million required to meet domestic consumption and conservatively another 70 million required to meet export markets for milk and dairy ingredients in SE Asia. Processors and industry have identified that there is immediate market demand for an additional 85 million litres by 2010.

While some of the demand for additional production can come from current suppliers, new entrants are required to meet this demand for increased production.