However, Australian dairy farmers will avoid lower returns in the short term with guaranteed prices locked in until the end of the current season, which finishes on June 30 next year, the specialist agribusiness bank said.
In its Q4 2025 Global Dairy Quarterly, the bank’s RaboResearch division said with Australian milk production down in the season to date, there had been small increases (of 0.10/kgMS) announced in October by some major dairy companies in southern Australia, taking weighted average prices to 9.05/kgMS or higher.
But a softer global dairy commodity market — which weakened through Q3 2025 before falling sharply into Q4 — will likely limit Australian milk prices to close out the current season.
RaboResearch senior dairy analyst Michael Harvey said the global dairy market was expected to face a period of weaker commodity prices following “stunning” global milk production growth across the second half of 2025.
Mr Harvey said global milk production growth is estimated to have peaked in Q3 2025, with Q4 growth likely to be not far behind.
“The EU and UK posted their strongest growth since 2017 for the month of October, while surging October milk flows saw the US post its fifth consecutive month where growth rates have been over three per cent,” he said.
“Not to be outdone, New Zealand farmers have been setting new milk solid records each month from May to September 2025, with the peak month of October the third highest output on record.”
