Australian Dairy Seasonal Outlook: A Global Storm Is Coming

In Rabobank's view, a plausible scenario is for global dairy markets to emulate a similar down cycle to that of the global financial crisis. “However, Australian dairy farm operators should take comfort in the significantly weaker currency, and domestic market premiums will support farmgate milk prices through the cycle.” according to Michael Harvey, Senior Analyst – Dairy.

“Current global market forces warrant more conservative opening prices from Australian dairy exporters. At the farmgate, better seasonal conditions, lower bills for purchased feed, and favourable livestock trading conditions will support farmgate margins. However, after a period of lower margins, dairy farmers will need to carefully consider the financial merits of rebuilding equity versus major investments and/or expansion projects.”