Recovery of Australian milk collections accelerates in June

Australian milk production continued its recovery in June, with collections rising 7% year-over-year and remaining above the five-year average. Favorable weather conditions, lower feed costs, and strengthening dairy prices have supported output growth throughout the first half of 2026.Australian milk collections observed a notable recovery in June, increasing by 7% compared with the previous year to 610.69 million liters. Production growth has accelerated since February, with the annual increase widening for the fourth consecutive month. The gains do not only reflect last year’s weak baseline, as production also stands above the five-year average.Overall, the country collected an additional 40.1 million liters of milk, with the majority of the increase coming from Victoria (+8.6% year-over-year). Most Australian states posted increases, with South Australia the only exception.However, milk solids (MS) output increased at a slightly slower pace, rising by 6.6% year-over-year over the same period, driven by lower fat and protein content in the milk. Fat content declined by 0.3% from the previous year to 4.46% in June, with the decline concentrated primarily in New South Wales and Victoria. In turn, protein content dropped by 0.5% to 3.52%, with declines observed in all states except South Australia.Australian milk collections recorded a remarkable recovery in the first half of 2026, reaching 3.9 billion liters through June, an increase of 4.2% compared with the previous year. The overall recovery has been supported largely by favorable weather conditions throughout the year.Although the effects of El Niño remain a significant risk to production, drought conditions have not yet emerged during the Australian winter. Winter weather has been broadly favorable for production, with the Bureau of Meteorology reporting mild temperatures and abundant rainfall between June and August. For September, a regional divergence is expected, with western regions receiving above-average rainfall and eastern regions below-average rainfall.The favorable weather conditions likely contributed to the decline in hay prices observed across pasture hay (-39%), cereal hay (-32.7%), and straw (-33.9%) in June. The picture for grains remained mixed, according to Dairy Australia, as maize prices increased, wheat and barley remained stable, and oats declined (-13.2%).The pricing environment in regional and international markets also appeared to improve gradually. Compared with the beginning of the year, prices have increased for mozzarella (+24.2%), SMP (+44.1%), and WMP (+5.2%).Relatively low feedstuff prices, abundant rainfall, and strengthening dairy prices translated into a supportive environment for milk production. These conditions extended into July and August, potentially indicating that milk production could continue to increase in the coming months. That said, the key period for the year’s production will likely be the Australian spring milk flush between September and November, which accounts for a major share of the country’s annual output.