Industry Analysis & Industry Trends
The Milk and Cream Processing industry has grown strongly over the past five years, despite challenging conditions in the domestic market. Rising demand for Australian milk in export markets has boosted industry earnings over the period. Industry revenue is expected to grow at an annualised 6.8% over the five years through 2016-17, to reach $2.2 billion. However, reduced domestic milk prices are expected to depress industry revenue by 3.0% in 2016-17. Industry profitability has fallen over the past five years as processors have been forced to absorb higher operating costs.
The ongoing milk war between the major supermarket chains, which has led to private-label milk products being priced at $1.00 per litre, has changed the way milk processors operate... purchase to read more
Industry Report - Industry Investment Chapter
The Milk and Cream Processing industry is moderately capital intensive. For every dollar spent on wages, the average milk and cream processor is expected to invest $0.19 in capital items during 2016-17. Modern manufacturing plants require substantial capital expenditure on sophisticated technology and equipment to increase productivity without the need for additional labour. However, the industry requires slightly more labour than related food manufacturing industries due to the nature of production, complex product sorting and significant product diversity, which may require labour to perform certain non-core functions, especially the coordination of supply to downstream markets.
Capital intensity varies greatly among industry players... purchase to read more