NEW season milk farmgate prices have been announced, with the response from farmers and advocacy groups ‘disappointed’, according to the June outlook report by Bendigo Bank Agribusiness.
The average southern farmgate price of major processors for 2025/26 is about $8.81/kg MS – about nine per cent (70 cents) above last season’s opening, and seven per cent (55-60 cents) above last season’s closing prices.
Advocacy groups point out the disparity between local and global dairy prices, which have lifted around 24 per cent since last year.
“We anticipate new season milk prices will reach $9.00/kg MS at some stage, but many are disappointed opening bids didn’t reach that mark,” the report says.
“Milk producers continue to face challenging seasonal conditions. An estimated 60 per cent of Australian dairy farms are thought to be impacted by either drought or flooding. Current season milk production is likely to finish slightly below last season’s 8.38 billion litres.
“But 2025/26 production is forecast to fall again to around 8.2 billion litres, or as low as 8.1 billion litres if adverse seasonal conditions are sustained.”
Bendigo Agribusiness said Australian cattle prices were broadly stronger throughout May. The Eastern Young Cattle Indicator now situates at 728c/kg, up 22 per cent from the beginning of the year. The National Young Cattle Indicator also saw some growth, now at 389c/kg, a 23 per cent increase from early January.
Competition at local markets between re-stockers and processing centres was prevalent throughout May as the recent rainfall has boosted confidence in the places such as the northern states. Southern processers have followed the trend of late last year and early 2025, travelling into the northern states to purchase new stock.
“However, there are reports now of most of those businesses fully stocked up. This may impact prices in June. Prices are still expected to be supported by the large export demand and the competitive nature of local markets,” the report says.
Key markets of the United States, China and Japan are forecast to continue being strong, however heading into the back-half of the year may see marginal declines due to the recent news surrounding Brazil. The additional factor of Australia triggering the safeguard mechanism in trade with China may also contribute to the overall marginal decline in export volume from late July.
Bendigo says Australian lamb prices edged higher throughout the first half of May, before lifting sharply over the final two weeks of the month. The National Trade Lamb Indicator finished May at 985 c/kg. This marks a 16.2 per cent increase month-on-month and is 30.9 per cent above the five-year average.
Lamb slaughter rates have remained elevated, as weekly lamb slaughter averaged almost 502 thousand head per week in May. Processing rates generally slow down throughout winter as the market awaits the arrival of new season lambs. This should see slaughter rates start to ease over the coming months.
“Lamb prices are expected to remain firm throughout June. They may not stay at the record levels seen in the last week of May, but still well-above the five-year average. Supply is expected to slow over the next few weeks which will offer support. However, the ongoing dry conditions will continue to encourage lamb and mutton turn-off which is keeping processing rates up,” the report says.
The National Mutton Indicator (NMI) had an interesting May. The NMI started at 625 c/kg, its highest point since June 2022, before falling 120 c/kg to the middle of the month. The NMI then regained almost all the losses over the following two weeks, climbing back to 620 c/kg. At this level, the NMI is up 101.5 per cent year-on-year and 36.3 per cent above the five-year average.
