Australia: Dairy and Products Semi-annual

Milk production in Australia in 2023 is forecast to decrease by three percent to 8.2 million metric tons (MMT). This is despite generally very good production conditions for 2023, particularly with record milk prices and easing grain and fertilizer prices. The slump in milk production is due to excessive rains last spring across much of the major dairy production regions and due farmers continuing to exit the dairy industry through farm sales and some dairy farms partially or fully transitioning to less labor-intensive beef cattle production. Milk production for the first quarter of 2023 was four percent down on the previous year but the gap is forecast to narrow to three percent for the full year. A three percent decline in factory use consumption is forecast to result in a decline in butter, skim milk and whole milk powder production with cheese production remaining stable. The focus on cheese production has been strong in recent years and now uses 40 percent of the national milk pool.