Skip to main content

Insights March 2023

14 March 2023 |Dairy

Insights March 2023

14 March 2023 |Dairy
The March update provides an analysis of production and pricing trends for Australian dairy producers.

Commodity overview

  • The Global Dairy Trade index declined this month, driven by declining milk powder, cheddar, and butter prices.
  • Australian milk production showed some positive signs in January but still remains very tight.  
  • Early announcements for 2023/24 opening farmgate milk prices will be eagerly anticipated in the coming months.

Australian milk production declined in January with a 12 per cent fall from December. However, the gap to production from 12 months earlier closed. Production in the first half of the season was 7.1 per cent down on last season with monthly shortfalls of 5-10 per cent. Pleasingly, January production was only 3.6 per cent lower year-on-year. While this is a step in the right direction, milk supply still remains very tight. Production for the season-to-date is still trailing last season by 6.6 per cent and is 8.5 per cent below the five-year average.

At a state level, New South Wales is continuing to see the largest decline in milk production. January production came in 11 per cent lower compared to last season. On the other hand, Victorian milk production has begun to close the gap to last season’s production. January production in Victoria 4.9 per cent lower year-on-year, an improvement on December’s 7.8 per cent gap. Western Victoria has led the improvement with January production in the region higher than a year earlier by 1.3 per cent. January production in Tasmania, South Australia and Western Australia was also higher year-on-year.

Global prices have resumed their easing trend amidst a softening global market. Global Dairy Trade (GDT) auctions saw butter and cheddar prices trend higher in mid-February before easing to start March. Cheddar prices in particular saw a significant decline of 11 per cent in the first March auction. Skim Milk Powder and Whole Milk Powder prices also trended lower over the last month. Softer prices for these commodities contributed to a decline in the GDT Index of 2.3 per cent in the past month. This places the index 35 per cent lower than a year ago and 5.6 per cent below the five-year average.

Australian 2022/23 average farmgate milk price was unchanged this month. This followed Fonterra’s step-up in farmgate prices in February. Farmers will be eagerly anticipating early opening price announcements for 2023/24. A softening in global milk prices observed over the last month is driven by improved supply in the northern hemisphere. This is expected to put some initial pressure on the opening prices. However, the reduced domestic milk pool should continue to support new season prices as processors compete to secure supply.


Sources: Global Dairy Trade, Dairy Australia

Any advice provided in this update is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Product Disclosure Statement(s) on our website ( before acquiring any product described in this update.

Related Topics

Most Popular

Dairy 09 October 2023
Insights October 2023
Dairy 14 February 2023
Insights February 2023
Dairy 08 August 2023
Insights August 2023
Dairy 12 April 2023
Insights April 2023
Subscribe to insights today

Receive reports direct to your email by subscribing to Rural Bank Insights.

Bendigo and Adelaide Bank acknowledges Aboriginal and Torres Strait Islander peoples as the First Peoples of this nation and the Traditional Custodians of the land where we live, learn and work. We pay our respects to Elders past and present as it is their knowledge and experience that holds the key to the success of future generations.

Rural Bank - A Division of Bendigo and Adelaide Bank Limited
© Copyright 2023 Rural Bank | ABN 11 068 049 178 | AFSL/Australian Credit Licence 237879