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Australian Cheese Markets

07 October 2012

Australian cheese production declined during the 10 years to 2011–12 with a trend away from producing cheddar toward non-cheddar cheese types.

While cheddar is the main cheese type produced in Australia, production of non-cheddar cheese varieties increased its share in total cheese production. The share of non-cheddar varieties (including fresh, hard, mould and semi hard varieties) increased from 44 per cent in 2002–03 to 54 per cent in 2011–12. Production of fresh cheese, such as cottage, cream and ricotta, increased by 64 per cent to 105 000 tonnes and of cheddar cheese fell by 24 per cent to 161 000 tonnes over this period.

Australian Cheese Production

The shift in product mix has been driven by changing consumer tastes in the domestic market as well as increased demand for non-cheddar varieties in Australia’s main export markets.

Australian consumption of cheese has trended upwards over the past 20 years as a result of higher disposable incomes and increased availability of different cheese varieties. Australian per person consumption of cheese increased by 12 per cent to 12.7 kilograms from 2000–01 to 2010–11.

Cheese Imports

Part of Australia’s increased cheese consumption has been met by higher imports. Australian imports of cheese rose by around 70 per cent to 74 600 tonnes between 2001–02 and 2011–12, with share in total cheese consumption nearly doubling to 25 per cent. New Zealand, the European Union and more recently the United States are the main sources for imports.

Australian Cheese Imports by Source Country

Australia has operated a tariff rate quota for cheese and curd imports since 1987. The tariff rate quota is set at 11 500 tonnes per year and is allocated to importers in July each year. Most cheese imported within the quota is sourced from the European Union. A concessional tariff rate applies to cheeses imported within the quota. The in-quota tariff is $96 a tonne while the above-quota tariff is $1220 a tonne (see customs.gov.au/webdata/resources/files/fscheesecurd1.pdf (pdf 80.95kb) for details).

Australia has free trade agreements with New Zealand (since 1983) and the United States (since 2005) that allow for zero tariff rates on cheese imported from those countries.

Asian Markets Growing in Importance for Australian Cheese

Australian cheese exports fell by 25 per cent in the 10 years to 2011–12 reflecting the decline in Australian production. Australia exports a mix of cheese varieties with cheddar accounting for just over 40 per cent and fresh unripened or uncured cheeses accounting for around one-third of total exports.

Australia’s key export markets for cheese are Japan, the Republic of Korea, Saudi Arabia, South-East Asia and China. The European Union, the United States and Saudi Arabia have become less significant markets for Australian cheese over the past five years. Australian exporters face increased competition in some Asian markets, particularly from the United States.

Globally, Japan is a relatively large market for cheese, importing around 215 000 tonnes in 2011. In 2011–12 Australia exported around 96 000 tonnes of cheese to Japan or around 60 per cent of total cheese exports. Japanese cheese imports from Australia, New Zealand and the European Union account for around 42 per cent, 26 per cent and 20 per cent, respectively of its total cheese imports—these shares have remained relatively stable for five years. However, cheese imports from the United States trebled to just over 20 000 tonnes in the three years to 2011 and now account for 10 per cent of Japanese cheese imports.

Australian Cheese Exports

The Republic of Korea is another key North Asian market for Australian cheese, having increased its cheese imports by 55 per cent to 76 000 tonnes in the six years to 2011. While cheese imports from New Zealand and the European Union increased slightly in the past two years, cheese imports from the United States trebled to 32 000 tonnes over this period. The United States is now the largest exporter of cheese to the Republic of Korea, accounting for just over 40 per cent of Korea’s total cheese imports. Australian cheese exports to the Republic of Korea have fluctuated between 7000 and 9000 tonnes over the past six years and now account for around 10 per cent of Korea’s cheese imports.

Republic of Korea Cheese Imports

Australian cheese exports to South-East Asia and China have increased over the last few years and this region is now the destination for around 20 per cent of Australian cheese exports. Key export markets within South-East Asia include Taiwan, Malaysia, Singapore, Indonesia and the Philippines. While cheese imports in China have trebled in the past six years, in global terms, it is still a relatively small market. Australia exported 11 500 tonnes to China (including Hong Kong) in 2011–12.

Outlook for Dairy

a At 30 June. b Includes the butter equivalent of butteroil, butter concentrate, ghee and dry butterfat. f ABARES forecast.
Sources: ABARES; Australian Bureau of Statistics; Dairy Australia

October 2012

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