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  • Writer's pictureFlow Australia

Dairy prices to remain high

Dairy farmers can look forward to another strong year but consumers will be spared any further price hikes, according to the latest agricultural outlook from Rabobank.

The bank's Australian Dairy Seasonal Outlook says producers can expect dairy prices to remain high but with input prices easing, pressure will come off consumers.

The price of milk and cheese increased by up to 20 per cent in the past year, but Rabobank does not expect to see those price hikes repeated.

"We don't expect to see another wave of price increases coming through on the dairy aisle," Rabobank's senior dairy analyst Michael Harvey said.

"The retailers, they're saying no more price increase requests are coming through, and there's a need to sort of stabilise the food price environment for consumers," he said.

Last year the farmgate price of milk jumped to record levels because of the high cost of production and high global dairy prices.

The outlook found farmgate prices are likely to remain high this year, with predictions the new season milk prices in southern Australia will remain around the same or at worst see a ten per cent decline for producers.

The new milk price will be set by June 1 and adopted on July 1.

"They (dairy producers) are going to get another good milk price which will ensure that they will make money and it'll be a good season and that's very much needed," he said.

It follows a tough period for dairy farmers who have battled low profitability, weather-related disruption and producers leaving the industry.

"It's a good milk price for farmers next season which will ensure profitability, but for consumers we don't expect more price pressure," Mr Harvey said.


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