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Dairy Australia Situation and Outlook December 2019

As drought, high input costs and limited feed availability continue to pressure dairy farmers, 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 reflects that ongoing drought, high input costs and limited feed availability continue to be the number one concern for dairy farmers, while the broader industry responds to external pressures and opportunities.

Operating conditions for dairy farms are mixed across the country. Farmers in part of southern Australia are experiencing a highly favourable season with plentiful pasture growth and many have been able to capitalise on a strong farmgate milk price. In comparison, those further north continue to face ongoing challenges.

As the season unfolds, dairy farmers are urged to continue to access Dairy Australia’s up-to-date resources to support seasonal decision-making at feed.dairyaustralia.com.au and contact their regional teams for localised programs and activities.

Listen to Trade and Industry Strategy group manager Charlie McElhone discuss key report insights with industry analyst and lead author Sofia Omstedt in episode 13 of Dairy Australia’s podcast.

Keep reading

Input costs

Hay and grain prices have eased by up to 32% and 22% year-on-year, respectively, despite remaining higher than the five-year average in almost every region. The December report shows a strong north-south divide around harvest and purchased feed.

Hay icon
32% YOY price decrease in some regions
Grain icon
22% YOY price decrease in some regions

Milk production

As Australia’s milk pool continued to decline over spring, Dairy Australia has reaffirmed its full season production forecast of a 3% to 5% decline to 8.3 to 8.5 billion litres in 2019-20. Dairy farmers and industry can access a detailed analysis of milk production figures for each region.

3% – 5%
YOY decline in milk production forecast for 2019-20
8.3b – 8.5b
litres predicted in 2019-20

Global demand

While farmers continue to plan and act in response to challenging seasonal conditions, global markets remain well balanced and supportive of steady-to-higher commodity prices, especially for powders, as Australian exporters continue to benefit from a relatively weak Australian dollar.

increase in SMP exports
increase in WMP exports

Australian supermarket sales

Australian supermarkets provide a stable market for dairy products. Value growth has been reported for all major products, especially for liquid milk. Over the past year, milk sales contracted 1.4% in volume but increased 3.2% in value. This was mainly driven by an increase in the average retail price of private label milk.

Milk bottle icon
3.2% value growth for milk
Milk bottle icon
1.4% decline in sales volume for milk

Video with lead author Sofia Omstedt

Listen to industry analyst and lead report author Sofia Omstedt share key insights from the December Situation and Outlook report for input costs, Australian milk production and global supply and demand.


Previous Situation and Outlook Reports

If you are interested in viewing previously published reports on the dairy industry's situation and outlook, please visit our archive.

Read previous reports
Situation and Outlook October 2019 report cover