In its latest outlook, Rabobank forecasts Australian agriculture is on track for consecutive seasons of dairy farm profitability. A positive rainfall outlook and low feed prices are likely to support cheaper feed, which along with a recovery in Australia’s grain production is set to bring down local feed prices significantly. Despite cheaper feed and high farmgate milk prices, the recovery in Australian milk production is being impacted by elevated cull cow prices.

In December, Rabobank’s Rural Confidence Survey showed a strong lift in confidence among dairy farmers and improved investment intentions. Rabobank expects milk production growth by 2% for the season, reaching 8.95bn litres.