Situation & Outlook Report
Dairy Australia provides the latest international and domestic market trends, statistics and facts, with expert analysis and unbiased insights.
Dairy Australia’s September 2023 Situation and Outlook Report indicates that the industry is navigating a challenging global market, amidst strong farmgate milk prices and growth in retail value across the dairy category.
Lower export prices are a result of weakened global demand for dairy products, particularly from China. Cost of living pressures continue to impact how consumers spend and as a result, importers globally are buying substantially reduced volumes of product.
The bright spot for Australian dairy farmers is the strong farmgate milk prices set for this season.
Competition for milk amongst processors was fierce following the announcement of minimum milk prices at the start of June. Despite a five percent contraction in milk flows during the 2022/23 season due to weather, flooding, labour issues, resource competition, and farm exits, growth was recorded in the final months. As we transition to spring, the Australian milk pool is expected to see further year-on-year growth, recovering from last season's production dip due to flooding.
Other global dairy exporting regions like New Zealand, the United States, and Europe initially recorded production growth in 2023 but are now stabilising. Variable weather conditions and declining herd numbers, along with tightening margins, are also factors at play.
Dairy has continued to deliver value growth in the retail sector and is a prominent product category for Australian retailers. Dairy retail prices have increased at the fastest rate compared to all other food groups, with the total value of dairy products sold offsetting any declines in volume sold. Fresh milk ranks third in total retail market value growth, closely followed by cheese in fourth place and yoghurt in ninth. [NielsenIQ retail wrap up Australia Q2, 2023]. Dairy retail prices have risen faster than those in other food groups, with total dairy product sales compensating for lower volumes sold.
Situation and Outlook September 2023PDF, 1.51 MB