The Australian Bureau of Agricultural and Resource Economics (ABARES) expects average farmgate milk price to lift 8% YOY in 2025/26. The higher farmgate values are forecast to raise the value of milk production to $5.8bn for the season, up 7% on the season prior as milk supply tightens and domestic demand remains stable.

Milk production is forecast to decline 2% to 8.2bn litres in 2025/26 driven by a smaller milking herd, expected to outweigh higher milk yields. Farmgate prices are expected to lift as a result but forecast to remain below historical highs of the 2022/23 season.

The value of dairy exports is expected to fall 7% to $3.5bn in the current season as both volume and value are forecast to fall. Milk powder export values are forecast to decline by 15% to $406m  for WMP and -11% for SMP to $686m due to increased global production from key competitors and falling global prices. However, butter export values are forecast to slide 1% to $1.2bn due to relatively low production of milkfats in Europe. Cheese export value is forecast to fall 4% to $1.2bn in 2025/26.