Situation & Outlook Report

Dairy Australia is the Australian dairy industry’s go-to source for the latest international and domestic market trends, statistics and facts, providing expert analysis and unbiased insights.

The latest Situation and Outlook report describes how national milk production is set to increase this season, as favourable weather, lower input costs and a relatively firm farmgate milk prices support some of the best dairy farming conditions of recent years.

This will be the first annual increase in national milk production in three years – with Tasmania, Gippsland and South Australia leading the charge. Increased milk supply in most regions is also supporting ‘cautious optimism’ for improved farm profitability.

The report also highlights significant changes in consumer purchasing habits resulting from COVID-19. While foodservice and route channel sales have declined due to reduced hospitality sector activity and travel, retail dairy sales have been fuelled by increased levels of home cooking and baking.

  • Situation and Outlook Report December 2020

    (08 December 2020)
    PDF, 1.65 MB

Listen to Dairy Australia’s John Droppert discuss insights from the October Situation and Outlook report with Rabobank senior analyst Michael Harvey.


Dairy Australia Podcast 39 - Situation and Outlook December 2020

Ausfine Foods’ Garry Embleton talks to Dairy Australia's John Droppert about the trade opportunities and challenges for dairy in the world's fourth most populous country.
Industry data
Situation and Outlook
Female dairy famer at milking facility

Milk production

Milk production conditions have continued to improve over spring, however, the Australian milk pool has plateaued as a smaller national dairy herd and issues around labour availability have added production limitations this season. Dairy Australia expects milk production to track towards the lower end of the current 1% to 3% growth range for 2020/21.

Australian market

Retail demand for dairy products remains elevated, with sales of milk and yellow spreads growing 4.6% and 8.7% respectively in the twelve months to November.  The easing of COVID-19 restrictions has seen foodservice demand rebound as people enjoy new freedoms, however consumers have continued to focus on buying larger packsizes, usually priced at a discount.

Disclaimer: Source: Nielsen Homescan based on a continuous panel of 10,000 households; excludes non-private dwellings & businesses, non-permanently occupied households & out-of-home/impulse purchasing. DAIRY AUSTRALIA calculation based in part on data reported by Nielsen through its Homescan Service for the dairy category for the 52-week period ending 01/11/2020, for the total Australian market, according to the Nielsen standard product hierarchy. Copyright (c) 2020, The Nielsen Company

Global markets

Global milk supply continues to grow, as incentives to curb production (due to COVID-19) in the US and EU have been phased out, and the southern hemisphere enters its peak production months. Whilst global commodity prices have been cushioned from severe impact so far, increased supply is likely to weigh on the market balance.

Previous Reports

Access previous Situation and Outlook reports from our Resource Hub.

Cookies help Dairy Australia improve your website experience. By using our website, you agree to our use of cookies.