Australian Milk Production Poised for Growth in 2023-24 Season

According to the March 2024 Situation and Outlook Report released by Dairy Australia, the national milk production is expected to experience a modest increase, projecting a growth of close to one percent compared to the previous season. The report attributes this growth to favourable weather conditions, which have surpassed the lower fgures recorded in the previous season.

Eliza Redfern, Dairy Australia’s analysis and insights manager, expressed optimism among Australia’s dairy farmers due to the improved weather conditions, recovering milk production, and positive trends in retail and global commodity markets. She highlighted the resilience of the domestic market, with notable increases in the sales volumes of cheese, dairy spreads, and yoghurt over the past 12 months.

Despite challenges posed by the global economic environment, including weak global demand and shipping disruptions, the report indicates a rebound in export commodity prices driven by a decrease in global milk supply. However, ongoing issues such as drought conditions affecting water availability for the Panama Canal locks and tensions in the Red Sea have led to vessel delays, tightened container availability, and increased freight costs.

Looking ahead, Dairy Australia anticipates continued pressure on farm proftability in the 2024-25 season due to global economic uncertainties. Nevertheless, Australian dairy farmers are in a favourable position to tackle these challenges, having experienced proftable seasons in the recent past. Many farmers have reduced their debt exposure, which provides some resilience against potential increases in interest rates expected later in 2024.

Overall, while the Australian dairy industry remains subject to global dynamics and challenges, the outlook for the upcoming season is cautiously optimistic. The industry’s resilience and adaptability, coupled with favourable domestic market conditions, position Australian dairy farmers to navigate the challenges ahead and continue contributing to the growth and stability of the sector.