Australian dairy production forecast to decline in 2025
Domestic dairy market remains robust
10 January 2025
1 minute read
By: According to the Dairy Australia December 2024 report, dairy farm margins have been pressured by lower farmgate prices and higher operating costs, according to a recent market report from AHDB in the UK.
Milk production in Australia grew during the 2023/24 season, supported by strong farm gate prices. 2024/25 volumes saw some year-on-year growth in the first half, but as the season progresses, a slight drop is expected overall, as dry weather conditions and tighter margins challenge further growth.
While some input costs have decreased, dry weather conditions during the 2024/25 milk season contributed to a rise in fodder and water prices pressuring margins.
Australian dairy has been well placed to capitalise on trade opportunities so far this season and has become more price competitive. Shipping challenges along other trade routes has improved the market for Oceania dairy, coupled with tighter milk supplies in the northern hemisphere. However, economic restraints in key importing countries, namely China, have persisted.
The domestic market remains robust, though a rise in domestic retail prices may shift demand in the coming months.
