Milk Value Portal Dairy Market Insights – March Quarter, 2022

Tight global markets have lifted the 2022/23 forecast for underlying commodity milk value (CMV) for Australian farmers to a midpoint of $A8.25kgMS.

The CMV spot price increased by 19% since the end of December, reaching over A$10.50kgMS by the end of March.

This implies a range for southern manufacturing milk price of between $8.50 to $9.00kgMS for the 2022/23 season, factoring in increased conversion and distribution costs for processors.

The broad-based inflation impacting input costs for local processors as well as farmers has only been exacerbated by the conflict in Eastern Europe with energy and feed costs spiking and global fertilizer supplies affected.

Despite the uncertainty affecting the outlook, opening milk supply contract offers are likely to be fully priced by early June, as competition for raw milk remains fierce.

While the outlook for milk prices is positive, margins will be squeezed along the supply chain and the Australian milk pool is expected to contract further in 2022, due to increased input costs, labour shortages and a drier weather outlook for key dairying regions.

The Milk Value Portal provides Australia’s dairy industry with the only primary sourced, independently verified data on farmgate milk prices in Australia’s eight milk production regions.  It is funded by the Australian Dairy Products Federation to create trust and transparency between farmers and processors.

Please view or download the Milk Value Portal Dairy Market Insights report here.

Register to receive regular insights from the MVP here.