Australian milk pool projected to stabilise in 2023-24

Australia’s milk pool shrunk at a rate of knots this financial year. What does the coming 12 months have in store?

Australia’s milk pool is likely to remain at 30-year lows next financial year, despite high prices at the farmgate.

Released today, Dairy Australia’s situation and outlook report confirms the nation’s milk output is likely to arrive at the 8 to 8.2 billion litre mark by June 30.

The last time the national pool was around that figure was back in the 1994-95 season, when it tallied at 8.2 billion litres.

And the diminished national output is expected to continue, with a slew of economic pressures constraining the expansion plans of many farmers.

Dairy Australia industry analyst Eliza Redfern said early expectations for the 2023-24 financial year were for the national pool to clock in at the 8 billion mark.

She said while that figure was open to change, current conditions had placed downward pressure on the milk pool.

“The vast majority of farming businesses enjoyed profit margins this season but profit is only part of the bigger picture,” Ms Redfern said.

“(Our research found) various medium-term constraints such as high land values, high beef prices as factors that will mean the milk pool will be between 8 and 8.2 billion this season and likely the same figure next season.

“That, of course, is subject to change. Weather will play a role, as it did during the 2023-24 season with the floods that impacted parts of Victoria, NSW and Queensland.

“A less influential La Niña event helped stabilise autumn weather. Forecasts have indicated the potential for El Nino in the 2023-24 season, which is why there’s an expectation that the milk pool will be stable around that 8 to 8.2 billion mark.”

Australia’s milk pool is at its lowest level in three decades. Picture: Chris McCormack

The national milk pool has evaporated by more than one billion litres since 2018, with the production drop pronounced in northern Victoria.

Output in the Goulburn Valley slashed by more than 30 per cent over the past five years, in part due to the fallout from the Murray Goulburn 2016 clawback and its demise as a household name the following year.

Ms Redfern said labour challenges and continued farm exits have also weighed on Australia’s milk pool over the past 12 months.

She said Dairy Australia’s purchased inputs price index showed costs for feed, fertiliser and fuel costs have remained high over the season.