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Situation & 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. 

The latest Situation and Outlook report describes how Australia’s dairy industry has been able to dodge most curveballs thrown by the COVID-19 pandemic and conditions on farm remain relatively favourable. 

Comparatively strong farmgate milk prices and subdued input costs have allowed farmers to focus their attention on calving and the spring flush and Dairy Australia’s current production forecast suggests a 0% to 2% increase this year, which would equate to a national milk pool of 8.8 to 9 billion litres. 

While the COVID-19 pandemic continues to affect consumer confidence, new lockdowns have not seen the same domestic panic-buying trends as before. After a spike in sales last year, shoppers have now reverted to pre-COVID purchasing trends, with sales of fresh and long-life milk tracking well in line with 2019. Plant-based beverages have grown in popularity, however, only 2% of buyers exclusively turn to these products and dairy demand remains strong. 

The report also discusses how in light of COVID-19 volatility, input markets have continued to offer stability for the industry. Temporary irrigation water prices remain subdued and fodder costs are also lower than last year. Tighter global supply has seen fertiliser costs increase, and droughts in the northern hemisphere have caused grain prices to rally. Nevertheless, many regions are on track to produce a significant amount of feed this season.

  • Situation and Outlook September 2021

    PDF1.75 MB

Inputs Market

Demand for supplementary feed remains relatively subdued and fodder prices steady, however grain and fertiliser costs have increased. Forecasts suggest more rain ahead which is expected to support water availability and pasture growth this spring. While mice, disease and labour shortages may impact crops, yield estimates for the upcoming harvest are strong.

Australian market

In the past year, sales of both fresh and long-life milks have stabilised, as shoppers reverted to long-term purchasing trends. In comparisons, sales of plant-based beverages have grew as it is becoming more common for consumers to try these products. This does not mean that Australians are shunning dairy; in fact, a vast majority of households continue to regularly purchase milk.

* 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 dairy category for the 52-week period ending 08/08/2021, for the total Australian market, according to the NielsenIQ standard product hierarchy. Copyright (c) 2021, Nielsen Consumer LLC.

Previous Reports

Access previous Situation and Outlook reports from our Resource Hub.

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