Global Dairy Trade: Australia’s farmgate gap closing

International dairy figures are on the way up, providing some encouragement over lingering Australian farmgate concerns.

A soft new year bounce on the international dairy market needs to be sustained into 2024 to keep Australia competitive.

That’s the view of dairy leaders with a slight rise in overnight trade on the Global Dairy Trade exchange.

The headline figure on the GDT index rose 1.2 per cent in recent trade to sit at $US3363 per tonne ($A4973), coinciding with the Australian dollar reaching a six-month high against the American greenback.

The latest bounce is the third consecutive trading GDT session in positive territory after a drubbing for dairy markets throughout 2023.

United Dairyfarmers of Victoria president Bernie Free said the triple market bounce was welcome but needed to be sustained in the coming months to get Australia back to a competitive position.

“There’s that old English saying about ‘one swallow doesn’t make a summer’ and that’s the case here,” he said.

“We need the international market to keep rising because the fact is that there’s a big gap between the farmgate and international prices.”

An influx of New Zealand cheese has been noted by Dairy Australia analysts in recent months, with its latest situation and outlook report recording 2023 as a record year for imported dairy into Australia.

International dairy prices softened in 2023. Picture: Zoe Phillips

Last year, domestic price rises led Coles and Woolworths to use New Zealand butter in their house brands, which is 20 per cent cheaper than famed Australian-made Western Star and Devondale brands.

ABS data showed New Zealand butter shipments were up 62 per cent in the 12 months to the end of June 2023; milk spiked by 74 per cent; and ice cream imports rose an extraordinary 105 per cent last financial year.