Rabobank: Australian milk production is experiencing robust growth
Source: The DairyNews
Rabobank's latest analysis reveals that Australian milk production is experiencing robust growth, buoyed by favorable seasonal conditions and strong farm gate margins. As the dairy season progresses, all dairying regions are witnessing widespread expansion in milk supply, signaling a promising outlook for the industry.
Key Points:
Production Growth: From July 2023 to January 2024, Australian milk production surged to 5.35 billion litres, marking a notable 2.5% year-on-year increase. This growth is attributed to exceptional summer rainfall across the east coast, providing optimal conditions for livestock producers.
Optimistic Outlook: Rabobank's senior dairy analyst, Michael Harvey, predicts a strong year ahead for Australian dairy farmers. With elevated milk prices and abundant feed resources, expectations for the 2024 season remain optimistic.
Forecasts: Rabobank anticipates a 2.6% increase in milk supply by the end of the 2023-24 season, with continued growth of 3-4% projected for the following year (2024-25).
Domestic Market Dynamics: While the domestic dairy market faces challenges, including strained household budgets and disinflation, improvements are expected in 2024. Factors such as increasing wages, tax cuts, and potential interest rate reductions are likely to bolster consumer spending and economic growth.
Export Performance: Despite a challenging start to the season, Australian dairy exports have faced pressure, with volumes down by 8.5% compared to the previous year. However, as milk supply expands, Rabobank anticipates a shift towards increased manufacturing and exports.
Global Dairy Trends: Globally, dairy prices have seen improvements amidst ongoing supply and demand challenges. Despite sluggish demand and weaker production in key exporting regions, Rabobank forecasts a gradual shift towards higher prices in 2024.
Future Outlook: While a return to 2022 price levels is unlikely, gradual price increases are expected in the coming months, providing a more favorable margin outlook for dairy farmers. Although not a record-breaking year, the return to profitability will be welcomed by farmers worldwide.
In summary, Rabobank's insights underscore the resilience of the Australian dairy industry, with promising growth prospects ahead despite global market dynamics.
Production Growth: From July 2023 to January 2024, Australian milk production surged to 5.35 billion litres, marking a notable 2.5% year-on-year increase. This growth is attributed to exceptional summer rainfall across the east coast, providing optimal conditions for livestock producers.
Optimistic Outlook: Rabobank's senior dairy analyst, Michael Harvey, predicts a strong year ahead for Australian dairy farmers. With elevated milk prices and abundant feed resources, expectations for the 2024 season remain optimistic.
Forecasts: Rabobank anticipates a 2.6% increase in milk supply by the end of the 2023-24 season, with continued growth of 3-4% projected for the following year (2024-25).
Domestic Market Dynamics: While the domestic dairy market faces challenges, including strained household budgets and disinflation, improvements are expected in 2024. Factors such as increasing wages, tax cuts, and potential interest rate reductions are likely to bolster consumer spending and economic growth.
Export Performance: Despite a challenging start to the season, Australian dairy exports have faced pressure, with volumes down by 8.5% compared to the previous year. However, as milk supply expands, Rabobank anticipates a shift towards increased manufacturing and exports.
Global Dairy Trends: Globally, dairy prices have seen improvements amidst ongoing supply and demand challenges. Despite sluggish demand and weaker production in key exporting regions, Rabobank forecasts a gradual shift towards higher prices in 2024.
Future Outlook: While a return to 2022 price levels is unlikely, gradual price increases are expected in the coming months, providing a more favorable margin outlook for dairy farmers. Although not a record-breaking year, the return to profitability will be welcomed by farmers worldwide.
In summary, Rabobank's insights underscore the resilience of the Australian dairy industry, with promising growth prospects ahead despite global market dynamics.
