The report, Be Confident, but Beware explained global dairy market fundamentals are strong and high local milk prices will support profitability, but farmer margins are under pressure from growing costs.
The report forecasted an indicative milk price of AUD 8.40/kgMS for South Australia in the coming season.
Rabobank senior dairy analyst and report author Michael Harvey said this would be a record price and 15 per cent higher than benchmark milk prices for the 2021/22 season.
“The global dairy commodity market is doing the heavy lifting in propelling farmgate milk prices to record levels,” he said.
“As a result, Australia’s southern (dairy) export region enjoyed record milk pricing in the 2021/22 season, with new records on the horizon for 2022/23.”
“Considerable cost inflation is already being felt on farm. Despite the coming lift in milk prices in the 2022/23 season, rising input costs mean there is potential for squeezed farm margins.”
