ANZ sees a bright future for dairy, despite forecasting the herd will be the smallest it has been for 30 years in 2021/22. ANZ estimates there will be 2.3m dairy cattle and a milking herd of 1.4m head in the current season. However, the adoption of new technologies had more than doubled average annual cow yields since the mid-1980s to 6,600 litres.

However, ANZ head of agribusiness Mark Bennett thinks the local dairy industry could be reaching a structural floor with dairy herd numbers flat before potentially rising again. He said labour availability was a challenge for some dairy producers, but technological advances were likely to reduce this in the long term, and global supply shortages could sustain higher farmgate prices. Bennet believes consumers seeking health diets is a positive for dairy demand and thinks outside investment into dairy production and processing could grow in 2022