Dairy Australia (DA) continues to forecast a slight drop in national milk production to 8.3bn litres in 2024/25. While output has been ahead so far this season, drier conditions, reduced incomes and longer-term challenges around labour and farm exits will constrain further growth.

The domestic retail dairy market continues to be robust, with retail volumes up for all major categories except drinking milk, but sales value much stronger, implying increased prices. More recent CPI data suggests cheese prices in particular have been under increasing pressure.. DA notes that as retailers will re-target shelf prices of key private label dairy products, under scrutiny from the competition regulator, value growth in the these categories may slow.