Australian Dairy Products Federation cautious milk season approach

Australian Dairy Products Federation (ADPF) executive chairman John Williams, said current conditions for the industry were tough and regional economies were at risk of being hit if no counter-action was taken.

"In the lead up to the new milk season, on top of the decline in global prices, Australian dairy processors are contending with low volume growth, exorbitant overhead and input costs (inclusive of energy, transport and raw milk), a tough and highly competitive domestic trading environment, and rapid growth in import competition," Mr Williams said.

He said as an example, year-to-date data in February 2023 saw imports from New Zealand up 22 per cent, and imports from the United States up 46 per cent.

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"Further, the current 20 per cent higher farm-gate milk prices being paid in Australia compared to New Zealand, places Australia at a competitive disadvantage, not only in export markets but it is also being reflected on our supermarket shelves with New Zealand made cheese and butter priced significantly cheaper than Australian made products," Mr Williams said.

With global trade competition, Mr Williams said to build food security and meet demand there needed to be more 'raw milk' produced which had become a leading challenge for Australia's dairy industry.

According to the ADPF, Australia's year-on-year production volume of national raw milk had decreased, down 8.5 billion litres in 2021 to 22.

Further forecasts suggested a 6 per cent drop for the 2022 to 2023 season and an additional fall by three to four per cent to 7.8 billion litres in the 2023 to 2024 season.

"Australia is home to some of the world's most advanced and modern milk processing technology available but without confidence current milk production trends will turn the right way, the Australian dairy processing industry will have to make decisions to reduce capacity and capability," Mr Williams said.