Western Australian dairy farmers are eyeing off a profitable year, after a period of hyperinflation on supermarket shelves. RaboResearch senior dairy analyst Michael Harvey shared insight on the market's performance to a packed crowd at Western Dairy's 2024 Dairy Innovation Day, Brunswick, this month. Mr Harvey said the dairy industry had a newfound level of market resilience, which was due to the simple fact that milk was performing stronger.
He said while it isn't great news for consumers, who are currently paying 30 per cent more for milk, it was for the supply chain moving forward. "When you look at cheese and other bulk ingredients, market returns aren't overly strong," Mr Harvey said. "This is the global pressure that we see having some impact on farmgate prices next season.
"It reinforces the story that around 80pc of WA milk goes into the white milk market and is outperforming the bulk ingredient market." Food inflation peaked at about 10pc to the Australian economy in 2022, and has since taken a long time to normalise. There are a significant number of food categories where inflation remains reasonably high - and dairy is one of them.
Mr Harvey said food inflation was now heading in the right direction, but it had been a challenging time for consumers. "From a dairy perspective, in the most recent cycle we have seen retail pricing close to 20pc for the consumer," he said. "Overall this is 20pc in milk, which provides a better return.
"We are of the view that, given t.
