March's dairy market update

Highlights for dairy

• Australian milk production continues to flag with full season milk output estimated at 8.3 billion litres. January production of 708 million litres was 2.6 per cent lower than January 2024. Weather outlooks are relatively neutral through to June so there is little likelihood of a rebound in production for the rest of the season.
• The reshaping of the Australian dairy industry continues. Ferraro Dairy Foods and Nepean River Dairy have both been placed under administration. Local processors face increased competition from cheaper imported products. Higher global prices this season have improved margins for processors compared to last season. But domestic focused processors continue to contend with cheap imported dairy products.
• The Global Dairy Trade Index has eased one per cent over the past month. Bearish sentiment due to trade wars has played some role. Mexico accounts for around 38 per cent of US cheese exports. This may cause some minor instability in supply flows. But the fundamentals remain supportive for global dairy prices. Global supply is tight and demand is expected to remain firm.

James Maxwell

Senior Agricultural Analyst

Jimmy is our Insights specialist for dairy which sits well with him due to his love of milk and cheese. His background is in cropping, having worked in the grains industry for over 15 years.