Dairy milk production is up, yet supermarket milk prices remain high

An unexpectedly wet summer time throughout a lot of Australia’s east coast has proved a windfall for dairy farmers, but this hasn’t translated into considerably cheaper costs on the grocery store checkout.

Milk manufacturing throughout Australia was up 2.5 per cent within the second half of 2023, in keeping with an evaluation by Rabobank launched at this time.

Beneficial climate in addition to increased farmgate costs noticed extra cows producing bigger portions of milk, totalling 5.35 billion litres between July 2023 and January 2024.

Workers say while milk prices have surged, workers processing the milk have yet to see their share. — Aussie dairy farmers produced 5.35 billion litres of milk within the second half of 2023 – up 2.5 per cent year-on-year. (9News)

There had been fears that the present El NiÃ±o climate sample would see agricultural manufacturing shrink, however widespread summer time rainfall meant these issues by no means materialised.

“With milk costs remaining elevated, expectations are that new season pricing from July 1 might be margin-supportive,” Rabobank senior dairy analyst Michael Harvey stated.

Rabobank forecasts that the 2023-24 season will finish with milk manufacturing up 2.6 per cent and that’s prone to rise as a lot as 4 per cent heading into the subsequent monetary yr.ï»¿

Whereas milk costs have crept down from file highs in 2023, the worth of dairy stays up 20 per cent from pre-inflationary ranges.

That is partly as a result of demand for dairy merchandise in Australia stays unsure, thanks partly to the price of residing disaster inserting strain on household budgets, forcing them to scale back their grocery payments.

Young woman shopping in the supermarket — Dairy milk costs have risen by 20 per cent within the final two years. (Getty)

“Australian family budgets stay strained, driving discretionary spending decrease, which is flowing into the meals basket,” Harvey stated.

“The monetary well being of Australian shoppers is anticipated to enhance because the yr progresses, wages improve, tax cuts kick in and inflation normalises.”

The worth of milk is predicted to fall for Australians within the coming months, however a unstable international market and conflicts in Ukraine and the Center East, in addition to delivery challenges within the Crimson Sea, imply a number of uncertainty stays.

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