Australia’s milk production continues to recover, as global supply is forecast to grow at a modest rate in the coming year, Rabobank says in its newly-released Global Dairy Quarterly.
In the Q3 report, titled Market Narratives are Shifting, the agribusiness bank said positive – though modest milk supply growth is expected from the world’s major dairy-exporting regions through the remainder of 2024 and in 2025.
Meanwhile, milk production in Australia in the 2023/24 season – which ended in June – was 3.1 per cent higher than the previous year at 8.4 billion litres (an increase of 249 million litres).
However, the bank is expecting Australian production to grow at a lower rate in the 2024/25 season – currently forecast at 1.5 per cent.
RaboResearch senior dairy analyst Michael Harvey said Australian milk supply growth has been widespread, with production expanding in all states and regions, with the exception of western Victoria (where dry conditions have constrained production).
New South Wales had “led the charge”, recording an impressive growth of 5.3 per cent in milk production for the 2023/24 season.
“Seasonal conditions remain mixed though across the key dairying regions,” said Harvey.
“There have been severe rainfall deficiencies so far in 2024 for western Victoria and South Australia, which are sizable milk production regions. However seasonal conditions elsewhere have been mostly favourable.”
Global market balance
The global dairy market remains “balanced, but sensitive to change”, the report says.
The next year could see significant shifts as production increases and markets adjust.
Harvey said milk production from the main global export regions had been elusive over recent years.
“Since the second half of 2021, combined milk production from the Big-7 dairy export regions – the EU, US, New Zealand, Australia, Brazil, Argentina and Uruguay – has only grown in three quarters,” he said.
However, high dairy prices in the first half of 2024, plus lower feed costs, have improved farmer margins, encouraging production.
RaboResearch expects milk supply from the major exporting regions to increase a modest 0.14 per cent in 2024 on the previous year.
“With producers seeing improved margins though, milk supply could make a distinct shift upward in 2025,” said Harvey.
“Our initial forecasts for 2025 suggest a 0.65 per cent year-on-year production lift from the Big 7, bringing global milk supply from these regions above the five-year average.”
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