Dairy Australia (DA) has forecast 1 to 3% growth in national milk production for 2020/21 in its October Situation & Outlook. Improved seasonal conditions and easing input costs will drive growth, although reduced herd and cow numbers will be a constraint in some key southern production regions.
Meanwhile, DA’s domestic sales database highlights the shift in channels as foodservice sales fell in the early months of the pandemic and retail surged. For highly profitable impulse lines such as flavoured milk, the switch to supermarkets wasn’t enough to offset reduced “on-the-go” purchases as people moved around less. In contrast, increased baking for locked-down consumers benefitted butter sales, which increased 18.2% in volume and 16.3% in value for the 12 months to the 9 August. Retail sales of other dairy products have grown strongly according to Homescan data, as consumption habits have shifted to value products in larger packsizes suited for home consumption.