Dairy Industry Outlook for December 2021 is updated

This spring, milk production has slowed in the four critical exporting regions, supporting
commodity prices. Wet weather has weighed on milk flows in the southern hemisphere, while higher feed costs and culling have impeded growth in the United States and Europe. For now, global supply is expected to remain relatively tight, at least until the northern hemisphere spring commences.

Global demand for dairy products has improved due to more countries' economies recovering from lockdowns. Freight remains a constant challenge and has seen some buyers rush to place additional orders to ensure supply. While this currently supports commodity prices, growing inventories may dampen the demand once product movement improves. Wet weather and cold fronts have impacted per-cow yields this spring.

Labor shortages, firm beef and land values, and business diversification also weigh on milk production. Any increase in Australia’s national milk pool is looking increasingly unlikely this season, despite otherwise profitable conditions.

Australian Farm Gate
Fresh Milk Price (AUD Cents per Litre) remains high at approximately AUD 0.55
Milk Solids (AUD Dollar per kilo) remains high at approximately AUD 7.19