Australian dairy farmers well placed for profitable year

Outlook still good despite rising cost of production
calendar icon 18 March 2022
clock icon 1 minute read
Dairy Australia

Dairy Australia released its latest Situation and Outlook report, which analyses the forces influencing the global market for dairy commodities and the effect they are expected to have on the profitability of Australian dairy farms in the coming season.

Despite costs going up across the board, dairy farmers in most regions are well-placed for another profitable year ahead, with strong international demand and weak supply boosting global commodity values.

Production in major dairy exporting regions has dropped due to adverse weather conditions, worker shortages and declining herd numbers, while buyers in key international markets are looking to build up stocks to mitigate supply chain disruptions.

Domestic consumption has rebounded over the holiday period, with foodservice sector sales up by 24% and retail sales on par with pre-pandemic levels.

Supportive market fundamentals provide cause for optimism even as costs maintain their upwards trajectory. With the national milk pool expected to shrink by between 1% and 3% this season, strong competition for milk is likely to continue, concluded the summary report. 

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