Australian Dairy Seasonal Outlook: In Pursuit of History

The settings are in place for Southern Australia EBIT performance to beat industry targets in 2021/22. If successful, this would be the first time since benchmarking began in 2006/07 that three consecutive years have exceeded the industry targets. A stable and marginally higher milk price outlook is a key reason.

Report summary

Rabobank forecasts a full-year milk price of AUD 6.65/kgMS for 2021/22 in the southern export sector.

The ample availability of home-grown feed will support on-farm profitability. However, there is potential upside risk to the price of purchased feed and home-grown feed inputs, which is a key risk to farmer margins in 2021/22.

Despite better visibility on the global front than at the same time last year, there are price and margin risks to the outlook. Sustained profitability will support production growth in 2021/22 – but a low national herd will limit the level of growth. Rabobank encourages disciplined cost management and diligent budgeting in preparation for the season ahead.