Australian Dairy Conference 2024: Rabobank predicts farmgate price stability

Mid-year dairy distress in 2023 has given way to optimism for farmgate prices in 2024, with industry leaders expecting the upward trend to continue throughout the year.

Softening input costs are putting Australian dairy farmers in a stronger position, despite an anticipated weakening of farmgate prices.

That’s the prognosis of industry watchers and farmers alike at this year’s Australian Dairy Conference, which is being held in Melbourne this week.

Rabobank senior analyst Michael Harvey said while it was too early to predict the 2024-25 opening price average, the trend was pointing in the right direction.

He noted international dairy commodity prices were on the way up after an August 2023 crash left domestic processors nervous.

“Conditions are pretty good for Aussie dairy at the moment and we expect the trend to continue throughout the year,” Mr Harvey said.

“Milk supply in Australia is starting to stabilise, on the back of a period where we’ve seen significant contraction in the national milk pool.

“Generally speaking, the industry is in a better position than what we thought it might have been six months ago because it hasn’t been as dry as anticipated, there’s plenty of rain around; there’s plenty of feed on the ground and margins are stronger now than they were in 2022 and 2023 with that easing of input costs.”

Michael Harvey, senior analyst, Rabobank Australia. Picture: Dale Webster

Mr Harvey also noted butter and cheese had been factors in rising inflation domestically, but had reset the pricing expectations of Australian consumers.

NSW dairy farmer Paul Weir is also speaking at this week's ADC, which includes international figures such as Ukrainian Agri Council chief Andriy Dykun, UK science communication expert Amy Jackson and Lactalis Australia chief Mal Carseldine.

Mr Weir told The Weekly Times that northern NSW and southern Queensland farmers were enjoying some of the strongest farmgate prices in living memory.

“We supply the Brisbane market and they cannot get enough milk. It’s as simple as that,” the Lismore region farmer said.

“I can’t speak for Victoria, but in northern NSW and across the border in Queensland, prices are really strong and input costs have eased to a degree, so margins are better than they were, that’s for sure.”