Q2 Dairy Market Insights Report – Out Now

The second quarter 2024 Dairy Market Insights Report has found higher domestic availability has limited cheese and butter imports to Australia.

However, the ‘cost-of-living’ crisis continues to impact demand, with the latest retail sales data indicating dairy sales are slightly down or flat and consumers are continuing to favour private label and discounters.

The report points to uncertain market conditions leading to a reduction in processing footprint and reduced raw milk demand for 2024/25.

On the international front, there is improving demand for cheese in the United States (US).

However, the added capacity of cheese production in the US is an important factor to watch, along with China’s ongoing slump in demand for milk powders and cheese.

The report (to June 2024) is now available on the Milk Value Portal (MVP), providing a summary of the national and global factors shaping the state of the industry.

Key factors identified include:

• The global dairy market outlook remains uncertain. While slow milk growth is supportive for commodity prices, weak demand remains a feature.
• China’s demand remains muted, with the domestic market over-supplied by local milk, there is limited demand for milk powders, although butterfats and cheese have fared slightly better.
• The MVP shows the estimated weighted average southern region farmgate milk prices opened the 2024/25 season on June 1 ranging from $7.94 and $8.20kgMS, 11 to 14 per cent lower than 2023/24.
• The underlying Commodity Milk Value was A$7.43 at the end of June and has since fallen to A$6.91 in late July.
• The uncertainty of market conditions and the reduced processing footprint of several milk processors over the past 12 months has reduced raw milk demand for 2024/25 compared to recent years.
• The new season’s southern region farmgate milk prices bring Australian dairy farmers into closer alignment with global markets, but still with an estimated premium of up to 10 per cent over the comparable NZ milk price midpoint of A$7.43/kgMS (protein adjusted).

Read the full report at milkvalue.com.au