March 8, 2024

 

Dairy Australia forecasts slight growth in national milk production

According to Dairy Australia's March 2024 Situation and Outlook Report, the country's milk production is expected to see a modest increase, with the 2023-24 season projected to close nearly 1% higher than the previous season, Dairy News Australia reported.

 

The report highlighted a consistent growth in Australian milk production each month of the current season, attributed to favourable weather conditions, notably compared to lower figures from the previous season.

 

Eliza Redfern, Dairy Australia's analysis and insights manager, noted a sense of optimism among the nation's dairy farmers, fuelled by improved weather conditions, recovering milk production, increased retail volumes, and a resurgence in global commodity values.

 

Despite persistent macroeconomic challenges, the domestic market for dairy products remains robust, with sales volumes of cheese, dairy spreads, and yoghurt experiencing growth over the past 12 months.

 

The report anticipates continued weak global supply growth supporting export commodity prices, albeit amid pressures on global demand due to economic challenges.

 

Additionally, disruptions in major trade routes, such as drought affecting water availability in the Panama Canal and tensions in the Red Sea, have led to vessel delays, tightened container availability, and increased freight costs.

 

Redfern said that while the global economic environment poses challenges for dairy exports, it has spurred demand for Oceania, including Australian products.

 

Despite potential pressures on farm profitability in the upcoming 2024-25 season, Australian dairy farmers, having experienced profitable seasons in recent years, are cautiously optimistic about the industry's resilience.

 

Reduced debt levels among farmers have also helped mitigate exposure to high interest rates, which are not expected to decline until late 2024.

 

-      Dairy News Australia