Dairy Australia predicts milk pool to shrink to 1990s levels

A new forecast by Dairy Australia predicts the national milk pool will shrink to its lowest volume since the mid-1990s.

AUSTRALIA’S milk pool is set to shrink to its smallest volume in a quarter century, with a new forecast projecting a four to six per cent contraction.

Released today, Dairy Australia’s situation and outlook report anticipates the national milk pool will hover around 8 to 8.2 billion litres by the end of the 2022-23 season.

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.

Dairy Australia industry analyst Eliza Redfern said floods in several states, input costs and labour shortages were all factors in the forecast contraction.

“We’re projecting a cut to the milk pool of between four to six per cent based on several short to medium term factors,” she said.

“There’s the worker shortage that many sectors are facing, there’s competition for land and resources and there’s also a number of farmers exiting the industry.”

Australia’s milk pool is set to be the smallest since 1994-95. Photo: Joe Castro

Climatic conditions have played a role in the national milk pool contraction.

“What also needs to be taken into consideration is the flooding in some dairy regions as well as the wetter-than-average season that farmers have had to work with in recent months,” Ms Redfern said.

“Australian dairy exports are extracting a larger-than-usual premium on the global stage and that held firm by limited product availability.”

Meanwhile, Ms Redfern said fresh sales figures in the situation and outlook report showed yoghurt bucking the downward retail trend.

While the volume of milk sold has dropped slightly by 1.5 per cent, the volume of generic label products sold rose 1.1 per cent between January 2022 and the start of this calendar year.

“Inflationary pressures have had an impact on the way Australians shop and that including shopping for dairy,” she told The Weekly Times.

“There’s been a shift in the milk category toward (generic) brands and that trend has also been seen with butter to a lesser extent.

“Yoghurt has really bucked that trend. There’s a been a return to working in the office, a return to school and yoghurt is a convenient and cost effective way to eat as a snack or for lunch.”