Based on data from the national Consumer Price Index (CPI), RABOBANK says in a new report that prices for dairy products are going up a lot, with milk prices going up at the fastest rate since records began.
In its Global Dairy Quarterly Q4 2022 – Walking the Tightrope into 2023, Rabobank says that while the Australian consumer has been strong in the face of rising costs of living, signs of weakening dairy demand are showing up as people’s willingness and ability to spend on non-essentials weakens.
“Households are switching to private label products, and volume declines are more noticeable in grocery and foodservice channels,” said Michael Harvey, senior analyst for Dairy and Consumer Foods at Rabobank and co-author of the report. “It looks like it will be a tough year for Australian consumers.”
“Australia’s dairy farmers are still making money, and the record milk prices are helping them,” Mr. Harvey said.
“Dairy farmers have had to pay more for fertiliser, fuel, and feed, but the high milk prices have mostly made up for that. While the lack of workers is still a big problem for dairy farming businesses.”
As the season winds down, Mr. Harvey said that Rabobank doesn’t expect milk prices to go up much more.
