Comparatively high farmgate milk prices and favourable weather in some regions ensured the 2023/24 season finished strong for Australian dairy farmers, however the outlook is more cautious for the remainder of the current season, according to Dairy Australia's latest Situation and Outlook report.

The December 2024 report showed since the start of the 2024/25 season, lower farmgate milk prices had increased margin pressure for dairy farm businesses. This has also improved the competitiveness of Australian dairy products, coinciding with export conditions strengthening and volume growth in domestic retail sales.
Milk production has continued to grow relative to last season, however Dairy Australia Analysis and Insights Manager Eliza Redfern explained that while profitability last season was strong overall, persistently high operating costs and ongoing climatic challenges were likely to impact milk production this season.
"The profitability of Australian dairy farming businesses was high over the 2023/24 season, as revealed by Dairy Farm Monitor Project (DFMP) data," Ms Redfern said.
"However, while conditions were relatively favourable in some regions, others across southern Australia began to dry. In the drier regions, feed inventories were drawn down heavily, contributing to the higher fodder prices seen this season."
National milk production continued to grow relative to last season, but without rain, the drier conditions, lower incomes and longer-term challenges around labour and farm exits are likely to hinder further increases.
"National milk production increased 1.3 per cent year-on-year (YOY) in October, tracking +1.7 per cent on a season-to-date basis," Ms Redfern said
"However, given the climatic conditions, Dairy Australia continues to forecast a slight drop in the national milk pool relative to the previous season, to 8.3 billion litres in 2024/25, with the potential to steady should drier regions receive better-than-expected rainfall."
The report also confirmed that Australian dairy products have seen their price competitiveness improve this season, coinciding with more favourable export opportunities.
Global demand has risen for Australian and New Zealand dairy, with higher commodity prices for fats and lower northern hemisphere production supporting higher farmgate milk prices in key export competitors including New Zealand, the US and EU, with farmgate prices sitting higher than Australia.
Local market conditions have improved for Australian dairy products as well, with the volume sold of cheese, dairy spreads and yoghurt in retail all increasing (3.2 per cent, 3.4 per cent and 7.0 per cent, respectively), while milk holds steady.