A new USDA GAIN report projects Australian milk production will increase 1.1% YOY in 2022 to 9.1bn kg, the result of a 0.7% expansion in cow numbers and a 0.4% lift in average yields per cow. This would follow a 1.1% decline in 2021 affected by wet winter conditions and labour shortages due to COVID lockdowns in major dairy states, in addition to international border closures as some farmers made the transition to a less labour-intensive beef cattle production.

With local fluid milk consumption expected to remain near flat in 2022 (and still falling on a per capita basis), most manufacturing milk is projected to flow into cheese, but output of 370,000t will still be lower relative to 2019. This would contrast with 2021 when processors focused on WMP and butter due to relative price advantages.