According to Rabobank’s annual Australian Dairy Seasonal Outlook the local dairy industry has “weathered the severe global storm” and is on track to exceed industry targets three years running. Rabo’s southern export region milk price forecast for the 2021/22 season is $6.65kgMS, reflecting more balanced upside and downside risks to the global outlook, and despite global freight and logistical challenges. Milk production is forecast to rise 1.3% to 8.8bn litres in 2021/22 with Tasmania leading the growth. The outlook is bolstered by improved water availability, giving irrigators more flexibility for the season ahead along with favourable feed supplies. There are some downside risks associated with Chinese buying behaviour.
Rabobank’s senior dairy analyst Michael Harvey says Victorian farmers have exceeded industry targets of $1.50 EBIT/kgMS in 2019/20 and are expected to exceed the mark again in 2020/21. Harvey called the return to profitability remarkable, given previous industry challenges and the global pandemic. There are some downside risks associated with Chinese buying behaviour remains.