A report from RaboResearch food and agribusiness reveals the latest trends and insights for diary prices. 

Improved dairy commodity prices are on the horizon in most regions throughout 2024, as most products recover from the lows notes towards the end of 2023.

Higher. diary commodity prices will translate into firmer farmgate milk prices in all regions. This is a welcome relief for farmers who struggle to achieved profitability in 2023.

The recent equilibrium between weaker supply matched by weaker demand will slowly shift throughout 2024, with prices moving to the upside as milk production continues to struggle but demand subtly improves.

Fonterra’s forecast milk price for the 2023/24 season has improved to NZD 7.80/kgMS. This new forecast midpoint is a 16% gain on the lowest farmgate forecast announced earlier in the season.

Australian milk production was firing on all cylinders over halfway into the season. There has been widespread growth in milk supply across all dairying regions due to favourable seasonal conditions and good farmgate margins.

Milk production reached 5.35bn litres from July to January, up 2.5% YOY.

Australian dairy exports were under pressure in the first six months of the season. Volumes were 8.5% lower than last year, with significant declines for milk, whole milk powder, and butteroil.

As milk supply grows into the new season, additional milk will be directed to manufacturing and potentially exports.

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