Q2 2023 Milk Value Portal Dairy Market Insights now available

The Q2 2023 Dairy Market Insights report (June 2023) is now available on the Milk Value Portal (MVP), examining in detail the macroeconomic and geopolitical variables impacting the dairy market in the short to medium term. Key points to note include:

• The global market outlook remains mixed with mounting pressures that are likely to slow milk supplies, with demand in major dairy consuming regions remaining weak.

• The market is looking to China and South East Asia to increase their imports, but as yet Chinese consumers remain cautious and South East Asian buyers are feeling no urgency to fill pipelines.

• The Australian dairy market remains disconnected from international returns, thanks largely to local milk shortages and the cheese sourcing decisions of major retailers. Nevertheless, the average wholesale value of the local market has fallen 20% since June last year.

• In comparison, competition through June 2023 after the release of all milk contracts – which again resulted in several rounds of increases – pushed Southern region farmgate milk prices within 3% of the previous end-of-season outcome. This reflects ongoing competition for a dwindling milk pool, which is continuing to place dairy company margins under pressure.

• Inflation continues to impact consumer confidence in Australia but there are signs it may have peaked in May/ June. However, it has had a significant impact with retail sales volumes remaining weaker than the prior year in major dairy categories. The significant value drift to lower priced product (private label and smaller pack sizes) in both categories is continuing.

To access the latest Dairy Market Insights report, please visit the Milk Value Portal by clicking here.