Dairy Australia quarterly report: Australians paying more for dairy

Australians are cutting back on milk and butter purchases at the supermarket, while foreign imports of dairy products are at record levels.

Australians are consuming less dairy but paying more at the checkout than a year ago, new data has confirmed.

Like most fresh produce, customers across the nation are cutting back how much milk, butter and cheese they consume as cost-of-living pressures bite.

Data published by Dairy Australia today found milk consumption nationwide sits at 1.4 billion litres as of November 2023, a year-on-year decline of 2.2 per cent.

In the same survey period, butter and butter blends dropped 1.3 per cent to sit at 59 kilotonnes.

Cheese sales have declined year-on-year, according to Dairy Australia data. Picture: Nikki Short

Cheese and yoghurt figures saw little change with Aussies going through 163 kilotonnes of cheddar, blues and soft cheese to post a 1.4 per cent decline year-on-year.

Dairy Australia industry analyst Eliza Redfern said inflationary pressures meant many consumers reassessed their purchases as they wandered past the supermarket refrigerator.

“Our research has found that Australian households are shopping more frequently but buying less product in each shop,” she said.

“So consumers are on the lookout for the best prices and making sure they only buy what is necessary for that week’s lunches and dinners.”

The latest situation and outlook report confirmed the 2022-23 financial year was a record dairy import season for Australia.

Coinciding with deregulation of the sector, imported products accounted for only 11 per cent of Australia’s dairy consumption in the 1999-2000 financial year.

However, last financial year, 27 per cent of dairy consumed domestically originated from abroad — mainly the US and New Zealand.

“Cheese is a key product category and held a larger share of the domestic market for a long time,” Ms Redfern said.

“Recent trends have shown a real increase in the volume of cheese coming from the United

States, both for retail and for food-service use in cafes, restaurants and other settings.

“There’s also been a notable increase in the import of butter and butter blends from New Zealand, with an oversupply of produce making its way here.”

United Dairyfarmers of Victoria president Bernie Free said the rising consumption of foreign dairy was a concern to the sector.

He said agricultural leaders needed to remind consumers about the importance of buying Australian-made produce.

“For many shoppers, I understand times are tough and that’s why they’re cutting back,” Mr Free said. “Shrink-flation is a big concern for shoppers. Not just in dairy but a whole heap of grocery items, they’re paying more for smaller quantities.”

Yoghurt sales defied the consumer cutback trend, with a 2.9 per cent year-on-year increase in sales — attributed to more Australians working in the office or out-of-home.

The trend is not contained to Australia with both British and Danish dairy research noting an upswing in yoghurt consumption in recent months — fuelled by the popularity of yoghurt pouch products.