The report also revealed that 84 per cent of dairy farmers are feeling positive about their own businesses.
With past downturns and variable seasonal conditions, many farmers are taking a conservative approach to operating their businesses and prioritising stability over expansion as a worker shortage and weather challenge business growth.
Climate is a concern for 40 per cent of Australian farm businesses — partly driven by the unpredictability experienced over recent seasons, the report said.
However, previous wet seasons have helped prepare the dairy industry for the drier conditions of an El Niño event likely to form later this year.
With plenty of irrigation water around and some improvements in feed availability, this will help take the edge off high input prices and market challenges.
Dairy Australia is projecting the milk pool will stabilise in the 2023-24 season.
And while workforce challenges and farmers exiting the dairy sector continue to weigh on production, there is some modest potential for growth.
“Competition to secure milk will continue to be strong in 2023-24 and farm gate milk prices likely to remain above average,” Dairy Australia industry analyst Eliza Redfern said.
“Falling export commodity prices are impacting dairy processor returns and incentivising imports, but a tight milk pool ensures the need for supply is strong.
“Consumer purchasing power has tightened and high-priced plant-based products are taking a hit.
“There are now less households purchasing plant-based beverages, with more households exclusively buying milk at 58.7 per cent and the majority of households purchasing dairy overall.”
For more information and to view the latest Situation and Outlook Report, visit: dairyaustralia.com.au/sando
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