Dairy Australia: the domestic dairy market remains robust
Source: The DairyNews
Dairy Australia introduced situation and outlook report march 2024, Dairynews.today writes.
Better-than-anticipated weather conditions, along with a recovery in milk production, surging retail sales, and a rebound in global commodity values, are fostering a sense of optimism within the Australian dairy sector amidst persistently challenging macroeconomic conditions.
Australian milk production has experienced growth every month this season, propelled by favorable weather conditions surpassing last season's figures. Dairy Australia now projects a slight increase in national milk production for the 2023/24 season, expected to end approximately 1% higher than the previous season. Improved weather, timely rainfall, and lower demand for supplementary feed have contributed to this growth, with regions like the Atherton Tablelands and southwest Western Australia seeing particularly advantageous conditions.
The financial resilience of Australian dairy farmers is noteworthy, with consecutive profitable seasons and reduced debt levels positioning them well for future challenges. However, high interest rates pose obstacles to industry investment, particularly for young or expanding farmers reliant on debt financing.
Despite economic constraints, the domestic dairy market remains robust, witnessing growth in sales of cheese, dairy spreads, and yogurt. While high interest rates and living costs influence consumer behavior, increased in-home consumption has bolstered demand for these products. Although retail price rises have slowed, elevated sales volumes are expected to support overall value retention.
Globally, economic challenges continue to dampen demand, impacting dairy trade volumes. Yet, Oceania's dairy products are experiencing heightened interest due to shipping disruptions and supply constraints elsewhere. Meanwhile, supply-driven recoveries in commodity export prices offer some relief.
Looking ahead, limited supply growth in key regions like New Zealand and the United States, coupled with persistent economic challenges, may exert pressure on profitability, "Dairy Australia" analysts report.
Nonetheless, increased export returns, domestic market strength, and growth in milk production in Australia are poised to mitigate some of the global uncertainties throughout the remainder of the 2023/24 season.
Australian milk production has experienced growth every month this season, propelled by favorable weather conditions surpassing last season's figures. Dairy Australia now projects a slight increase in national milk production for the 2023/24 season, expected to end approximately 1% higher than the previous season. Improved weather, timely rainfall, and lower demand for supplementary feed have contributed to this growth, with regions like the Atherton Tablelands and southwest Western Australia seeing particularly advantageous conditions.
The financial resilience of Australian dairy farmers is noteworthy, with consecutive profitable seasons and reduced debt levels positioning them well for future challenges. However, high interest rates pose obstacles to industry investment, particularly for young or expanding farmers reliant on debt financing.
Despite economic constraints, the domestic dairy market remains robust, witnessing growth in sales of cheese, dairy spreads, and yogurt. While high interest rates and living costs influence consumer behavior, increased in-home consumption has bolstered demand for these products. Although retail price rises have slowed, elevated sales volumes are expected to support overall value retention.
Globally, economic challenges continue to dampen demand, impacting dairy trade volumes. Yet, Oceania's dairy products are experiencing heightened interest due to shipping disruptions and supply constraints elsewhere. Meanwhile, supply-driven recoveries in commodity export prices offer some relief.
Looking ahead, limited supply growth in key regions like New Zealand and the United States, coupled with persistent economic challenges, may exert pressure on profitability, "Dairy Australia" analysts report.
Nonetheless, increased export returns, domestic market strength, and growth in milk production in Australia are poised to mitigate some of the global uncertainties throughout the remainder of the 2023/24 season.
