Despite higher retail prices and financial pressures facing consumers, dairy remains a staple product and trust in the dairy industry is at an all-time high*.
The majority of Australian households continue to purchase dairy (97%) and more households (33.8%) are shopping between four or more retailers, as they look for cheaper options. Opting for private label products continues as a key cost saving strategy.**
While the volume of milk sold has dropped slightly by 1.5%, the volume of private label products sold rose 1.1% in the 52 weeks to 29 January 2023, further increasing the portion sold compared to branded milk. Volumes of cheese and butter are also falling, but yoghurt continues to buck the trend, growing 1.7%**.
In the March 2023 Situation and Outlook Report, Dairy Australia forecasts a contraction of between 4% to 6% in the Australian milk pool this season, due to worker shortages, competition for land and resources, and wet weather conditions.
With local milk production contracting, Australian dairy’s commodity prices are strong compared with other exporting countries, helping insulate the industry from some of the pressures emerging overseas according to the report.
Global commodity values have dropped, along with international demand for dairy.
“The level of dairy product available for export globally is growing, as production in other countries outweighs local demand,” said Dairy Australia’s industry analyst, Eliza Redfern.
“Global commodity prices have reduced, with wholesale buyers more price sensitive as challenging economic conditions continue and many countries on the brink of recession.”
“Australian dairy exports are extracting a larger-than-usual premium on the global stage, held firm by limited product availability,” said Ms Redfern.
For more information and to view the latest Situation and Outlook Report visit dairyaustralia.com.au/sando.
* Dairy Australia Trust Tracker, 2022.
**NielsenIQ 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 NielsenIQ through its Homescan Service for the fresh and long life milk categories for the 52-week period ending 29/01/2023, for the total Australia market, according to the NielsenIQ standard product hierarchy. Copyright © 2023, Nielsen Consumer LLC.
