Bendigo Bank’s November dairy update is cautiously positive, noting that milk production in southern mainland states has improved during spring. Time will tell if it is a sustained recovery. The Bank warns that any increases to farmgate milk prices are likely to be driven by processor competition or price support for farmers through another high-cost season rather than market returns. With major global milk producers continuously reporting year-on-year growth in milk solids output, prices are likely to remain under pressure.

Meanwhile, the bank says easing grain prices and reports that crops are cut for hay are welcome news to dairy farmers with feed remaining a key risk.