The drought is beginning to affect the local and international markets, with Australia's dairy production predicted to drop around 10% this season, which will limit the product available overseas, pushing up prices for what is on offer. The 2006/07 Australian season has started deceptively strongly, with milk production for the first five months ahead of last year by nearly 1%. However, the impact of the drought will be seen in coming months, with Dairy Australia currently forecasting a 10% decline in milk production, to 9.1 billion litres for the season, writes Dairy Australia's industry analyst - Australia, Peter Wilson.
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