Most farmers recognise the strength of current dairy prices. The National Dairy Farmer Survey reveals a shift in what farmers regard as the most important future challenges to their business: drought and climate variability have overtaken milk price as the most important future challenge (28 per cent of dairy farmers). While this was a significant shift nationally, price remains the greatest challenge in some regions. The high prices for dairy products on the global market are the result of less supply from the traditional exporters of dairy combined with steady demand, which in turn is being driven by a strong world economy and improved perceptions of dairy, particularly in developing countries. The global market is likely to remain strong, driven by commercial demand rather than policy change which provide favourable price conditions. Helping dairy farmers respond to the drought was a key feature of Dairy Australia’s work during 2006/07. The following sections profile the phases of the drought response and other key program outcomes as well as a summary of program performance for all Dairy Australia investment and activity during 2006/07. CLIMATE LABOUR WATER COST OF OTHER INPUTS COST OF FEED PROFITS PRICE OF MILK % OF FARMERS
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