Australia: Dairy and Products Annual

Milk production in 2023 in Australia is forecast to decline by another two percent to 8.4 million metric tons (MMT), after an estimated six percent fall in 2022 to 8.55 MMT. This decline is expected despite a big increase in farm gate milk prices for 2022/23 to far exceed the previous record, and overall good seasonal production conditions for dairy farmers leading into the forecast year. The shortage of labor has precluded dairy farmers from taking advantage of these factors and will impact 2023 production. Factory use consumption of milk is forecast to decline to 5.535 MMT, from an estimated 5.685 MMT in 2022, pressured by lower milk production and also forecast growth in milk fluid exports in 2023. Australia is continuing to focus its processed milk products towards cheese production, which is set to remain fairly steady in 2023. However, the volume of butter, skim milk powder and whole milk powder production and exports are all forecast to decline moderately in 2023.