Global Dairy Trade numbers dip as milk pool concerns rise

New inflation numbers show Australians are paying less for dairy than they were a year ago.

Medium-sized processors need to step up or risk the Australian dairy industry’s productivity flatlining in 2025, farm lobby leaders say.

Bega, Fonterra and Saputo are the only processors to provide step ups this season, with fellow big player Lactalis and medium-sized operators such as ACM, ADFC, Bulla, Burra, Frestine, KyValley and UDC keeping their opening July prices static.

Dairy Farmers Victoria president Mark Billing said processors needed to play their part in maintaining pricing momentum as a way of boosting on-farm productivity.

“Since Fonterra, Bega and Saputo lifted before Christmas, the medium-sized players should really have matched them and haven’t,” he said.

“Input costs are rising, particularly as summer conditions mean demand for fodder rises.

“If the processors want a strong dairy industry, then maintaining that farmgate price momentum will help with getting the Australian milk pool heading in the right direction.

“At the moment, productivity is flatlining and that’s not good for anyone — processors, farmers or consumers.”

Overnight, the headline figure at the latest session of the Global Dairy Trade index lowered by 1.4 per cent, to sit at $US4029 ($A6466) a tonne.

Much of the drop was attributed to weaker demand for whole milk and skim milk powder, while cheddar and mozzarella lifted in this week’s trading session.

Butter prices also rose in a 2.6 per cent uptick to reach US$6815 ($A10,937) — with a continued butter shortage in Russia having a flow-on effect elsewhere.

“GDT is usually quieter this time of year — the medium-term trend for international prices in the past six months has been rising,” Mr Billing said.

On Wednesday, the Bureau of Statistics released its latest inflation data which showed dairy was one of the few food categories to lower in price in the past 12 months.

The ‘dairy and related products’ category dropped 1.8 per cent between October 2023 and October 2024, the ABS data confirmed, while the fruit and vegetables category rose by 8.5 per cent over the same 12-month time frame.

The surveyed period coincided with a cut in the price of generic milk by Aldi, Coles and Woolworths from $1.60 to $1.55 per litre — the first reduction of its kind since the January 2011 ‘dollar a litre’ marketing drive.

eastAUSmilk president Joe Bradley said most Australians would willingly pay a little more to ensure a reasonable return to farmers.

“The current attitude from supermarkets with cheap milk is doing immense damage to Australian dairy farmers and the future of the industry,” he said.

“A 10 or 20 cent per litre rise in the price of milk isn’t much for most people but it will go a long way to ensuring we have a fresh milk industry for our kids and grandkids.”