Rabobank forecasts strong opening price for 2021-22 southern Australia dairy season

Australia’s big three processors recently stepped up at the farmgate and one of the nation’s leading dairy analysts predicts the 2021-22 season could be even better.

Rabobank has painted a rosy picture for Australian dairy next financial year. Picture: Zoe Phillips

SOUTHERN Australia’s opening farmgate price for the 2021-22 financial year may outpace the current season, with new projections painting a rosy outlook.

Rabobank has today released its milk price forecast, which senior dairy analyst Michael Harvey says points to an indicative weighted average of $6.65/kg milk solids.

Mr Harvey said the $6.65/kg figure was in line with current season expectations.

“Price signals ahead of the 2021/22 season remain favourable with the upside and downside risks to the global outlook more balanced then they were this time last year,” he said.

“That said, while the pandemic-related uncertainty has subsided, it has

certainly not disappeared.”

In its annual Australian Dairy Seasonal Outlook, Rabobank said the Australian dairy sector was eyeing the prospect of a trifecta of profitable annual returns for dairy producers in the southern export region.

Using the Australian Dairy Plan target – at $1.50 EBIT/kg milk solids – as the profitability

measure, the report says Victorian farmer margins exceeded industry targets in 2019/20 and are expected to again in 2020/21.

And things are on track for a similarly strong result in 2021/22 in the majority of

dairying regions in Australia.

“If successful, it would be the first time since benchmarking began in 2006/07 that three consecutive years have exceeded industry targets,” Mr Harvey said.

“The elevated outlook for the milk price is key to profitability but also favourable seasonal conditions and livestock trading conditions.”

As part of the mandatory dairy code of conduct introduced by the Federal Government last year, all processors are compelled to publicly report opening prices on June 1 — a full month out from the start of the new financial year.

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