Dairy Australia’s Situation & Outlook May 2022

by | Jun 1, 2022 | Australia, Volume trends

Australian milk production is expected to fall 3.5% YOY in 2021/22, to 8.57bn litres. Ongoing constraints and heightened margin risk will continue in 2022/23 with milk forecast at 8.55bn litres for the season, despite rising farmer confidence and higher milk prices.

Competition for land, high beef prices and ongoing labour constraints are contributing to farmer exits and holding back potential expansion plans. Rising fuel and fertiliser costs and significant uncertainty in the wider economy is adding to a cautious business posture among farmers.

Foodservice sales have rebounded with café and restaurant spending surging in the three months to February 2022, compared to a year ago – even tracking ahead of pre-pandemic comparatives.

Inflation has arrived at the dairy case with the value of milk, cheese, yellow spreads and yogurt all increased in proportion to volume sold.