Dairy Situation and Outlook March 2023 report

Dairy Australia’s latest Situation and Outlook (March 2023) was released this week and confirms that while milk production has actually grown in many key export markets, the milk pool in Australia will contract this year, forecast to be down 4-6% versus last season.

The report also confirms that consumer behaviour has changed in response to cost-of-living pressures including food inflation – shoppers are moving between retailers to get the best prices and continue to pursue and prioritise private label products over product loyalty.

We note that the ongoing factors impacting milk production in Australia continue to be labour shortages (and related shortage of housing in many regional areas exacerbated by the 2022 foods), competition for land and resources, and climate related factors particularly the 2022 floods.

Processors continue to be squeezed by the competitive pressure of obtaining milk from a shrinking pool as well as continuing to absorb high overhead costs.

On a positive note, the report confirms what we have been saying recently – dairy foods remain an important dietary staple for Australians, and in fact trust in the dairy industry is now at an all-time high.

For further insights, please access the report: http://bitly.ws/BpJ9