Australia’s milk production is showing signs of recovery, with global milk supply expected to grow at a modest pace over the coming year, according to Rabobank’s latest Global Dairy Quarterly report.
The report, titled “Market Narratives are Shifting,” projects modest milk supply growth from the world’s major dairy-exporting regions throughout the remainder of this year and into the next.
For the 2023/24 season – which ended in June – milk production increased by 3.1 per cent year-on-year, reaching 8.4 billion litres – an additional 249 million litres.
However, the agribank specialist expects Australian production growth to slow in the 2024/25 season, with a forecast increase of just 1.5 per cent.
Michael Harvey, senior dairy analyst at RaboResearch, shared that the country’s milk supply has seen increases across all states and regions except western Victoria, where dry conditions have limited production.
“New South Wales led the charge, recording an impressive growth of 5.3 per cent in milk production for the 2023/24 season,” he continued.
Globally, the dairy market remains “balanced, but sensitive to change,” with significant shifts anticipated in the next year as milk production increases and markets adjust.
Harvey also pointed out that milk production from the main global export regions has been limited over the past few years.
“Since the second half of 2021, combined milk production from the Big-7 dairy export regions – the EU, US, New Zealand, Australia, Brazil, Argentina, and Uruguay – has only grown in three quarters,” he added.
However, he also mentioned that high dairy prices in the first half, along with lower feed costs, have improved farmer margins, encouraging more production.
RaboResearch forecasts a modest increase of 0.14 per cent in milk supply from the major exporting regions compared to the previous year.
“At a retail level, price deflation continues to occur within supermarket aisles in South America, the US and most of the EU,” Harvey added.
“In response to weak consumer spending in food service channels, companies are spending more on promotions and advertising as consumers’ pinch pennies’.”
