Situation and Outlook Report

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.

With ongoing favourable conditions in most regions, many dairy farmers are enjoying one of the best seasons in years as outlined in the latest Situation and Outlook report. As the La Nina weather event generated a generally wetter and cooler summer, feed production has continued to improve. Farmers have been able to store significant amounts of fodder for the winter months and demand for purchased feed is expected to be muted for some time.

Despite improved operating conditions, milk production growth has been affected by a smaller national herd, labour shortages and continued farm exits. Dairy Australia has revised its milk production forecast to a -1% to +1% change in the national milk pool this season.

Globally, the report describes how demand for dairy has continued to gain momentum as more countries emerge from lockdowns. This has seen commodity prices increase, with milkfat products, like butter and cream, in particular experiencing a resurgence over the past few months. In addition, commodity price increases have been supported by slowing milk supply growth.

  • Situation and Outlook Report December 2020

    (08 December 2020)
    PDF, 1.65 MB

In the latest episode of DairyPod, co-founder of Gippsland Jersey Sallie Jones talks to Dairy Australia’s John Droppert about Gippsland Jerseys approach to building value into dairy products admits the volatile market environment outlined in the latest March Situation and Outlook report.


DairyPod podcast 25: Situation and Outlook Report - June 2020

Dairy Australia’s Industry Insights and Analysis Manager, John Droppert, sheds some light on the factors that have driven a significant recovery in national milk production and boosted dairy farmer confidence in many regions.
Industry data
Manufacturing and Trade
Situation and Outlook
Situation and Outlook Report June 2020 thumbnail

Input costs

With an early break and wet weather forecast for many regions, demand for purchased feed has decreased, resulting in hay prices easing in most regions. Improvements in both global and domestic grain production forecasts have seen pressures on Australian grain prices starting to ease.

National Dairy Farmer Survey

With more manageable input costs, generally favourable seasonal conditions and a relatively strong farmgate milk price this season, overall industry confidence has improved. Data from the National Dairy Farmer Survey, conducted in February, reveals that 44% of farmers were reportedly positive about the industry’s future, up 10% from last year.

Milk production

Better conditions and improved farmer confidence have resulted in a significant recovery in Australia’s milk pool during 2020. Dairy Australia’s initial forecast for the 2020-21 season anticipates a modest rebound in milk production, up between 1% to 3%.

Australian retail market

Following the outbreak of COVID-19, retail sales of dairy products surged, as consumers stocked up pantries and fridges in preparation for restrictions. In Australia the retail sector usually accounts for a larger share of national dairy consumption which resulted in a temporary overall increase in dairy sales at the start of the pandemic.

Disclaimer: Nielsen 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 Nielsen through its Homescan Service for the dairy category for the 4-week period 22/03/2020, for the total Australian market, according to the Nielsen standard product hierarchy. Copyright © 2020, The Nielsen Company.

Global economy

Over the past few months global milk production growth has started to slow. New Zealand milk production is expected to decrease slightly this season due to below average rain, while high feed costs in the European Union have curbed milk flows. At the same time, global demand has been increasing which has supported dairy commodity prices.

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