May's Dairy market update

Highlights for dairy

• New season farmgate milk prices are due to be announced on June 1. Tight local supply, stabilising global prices and improving demand should see farmgate prices rise in the coming season. 2025/26 farmgate milk price offerings have every chance to reach $9/kg MS at some stage. But processors are likely to open cautiously with estimates around the $8.70-$8.90/kg MS.
• Australian milk production in March was close to unchanged on last year. This is an improvement on the trend of lower monthly production seen in the past three months. But ongoing dry conditions in southern regions continue to affect production. Dairy Australia reports extreme pressure on cash flow for producers in drought affected areas with herds being culled or dried off which is impacting production.
• Industry contraction continues with Bega the latest to announce a plant closure. Bega will close their Strathmerton cheese processing and packaging site resulting in the loss of around 300 jobs. Bega have also expressed interest in purchasing Fonterra’s Australian operations. Lactalis look to be the front runner to acquire Fonterra’s sites having lodged an application with the ACCC.

James Maxwell

Senior Insights Manager

Jimmy is our Insights specialist for dairy which sits well with him due to his love of milk and cheese. His background is in cropping, having worked in the grains industry for over 15 years.