Dairy data show exports up and Australians still loving dairy

Milk production last financial year was down slightly to 8.6 billion litres, but the value of farmgate production increased to $4.9 billion according to Dairy Australia’s annual in-depth analysis, In Focus.

And while Australians consumed less milk (93 litres of milk compared to 94.4 litres in 2020/21), other dairy categories grew. Australian dairy consumption also remains one of the highest in the developed world with more than 90% of households purchasing milk. 

‘Coffee culture’ and flavoured milk increased demand for milk, but fresh milk remains the product of choice ahead of flavoured milk and UHT milk, which grew in popularity during the first national lockdown due to the outbreak of COVID-19.

The consumption of cheese in 2021/22 remained robust, with non-cheddar cheese, for example, mozzarella increasing in demand due to its use in the food service sector and being sold by retailers.

With consumer preferences shifting to less sugar, more yoghurt is also being consumed (9.6kg compared to 9.5kg in 2020/21), especially Greek and natural-style yoghurts. Sales rose at the start of the Covid-19 outbreak with consumers wanting a healthier product, buying also for home cooking and baking. Packaging, flavour combinations, probiotic cultures and new products (e.g. drinking yoghurts) have further boosted sales.

The country’s national milk pool fell 3.4% but the portion of milk exported rose from 32% to 36%.

Whilst the volume of product exported increased roughly 17,000 tonnes from 2020/21, the value of these exports surged to $3.8 billion - reflecting the high commodity prices offered over the season.

Dairy Australia’s Industry Analyst, Eliza Redfern, said despite a drop in milk volume, Australia remained a significant exporter of dairy products, with a five per cent share of the world dairy trade, behind New Zealand, the European Union and the United States.

“Milk production did fall from 8,858 million litres in 2020/21 to 8,554 million litres in 2021/22, but Australia still ranks fourth in world dairy trade, with farmers and processors continuing to deliver high quality milk to the world,” Miss Redfern said.

Australian farmers across the country received an average price of $7.52/kg MS at the farmgate, however, the number of dairy farms continued to fall. The 2022 trend was in line with the historical trend towards fewer farms, larger herds and these farms producing more milk.

“The staff shortage was an issue for the industry leading to many farmers diversifying or converting their businesses to beef and lamb, milking smaller herds, or even selling the farm. Ultimately, this meant a fall in the national milk pool,” Miss Redfern said.

With lack of labour being an issue across the country, the dairy industry has prioritised worker shortage, focusing on both attracting and developing people to work in dairy regions.

Managing Director Dr David Nation said this includes Dairy Australia continuing to invest in programs such as Workforce Attraction, launched this year, that supports farmers in finding and retaining staff via several pathways, including careers education for school students and dedicated regional staff to connect farmers seeking workers with jobseeker networks.

The dairy industry is the third largest rural industry in Australia and directly employs 34,700 people, either on dairy farms or in dairy processing companies. 

Read more about the 2022 In focus report.