Report 29 – Released on July 18, 2019

AUSTRALIA:

Rainfall and moisture conditions are mixed in this opening month of the new dairy season. Southwest and northern areas are very wet following heavy rains. This limits new season hay availability. Hay should be in better supply than last year once the ground is dry enough for tractors.

However, parts of New South Wales and Gippsland are very dry and hoping for rain. Crops and hay are struggling under the dry conditions. Southern Australia has very low carryover hay from last season. This is worrisome in terms of costs of production and cash flows in the area.

The initial forecast from a significant Australian dairy organization is for a 3 percent to 5 percent drop in milk production for the 2019-20 season.

NEW ZEALAND:

The sale of a large cooperative dairy processor located on the West Coast of New Zealand to a subsidiary of a Chinese company seems assured. The vast majority of shareholders voted in favor of the sale. Some previously voiced concerns were addressed by final deal terms. These include cash payments to existing shareholders, assumption of the cooperativeśs debt, assurance that the new owner will pick up producer milk for ten years, and assurance of price parity with the largest New Zealand dairy cooperative.

A zero carbon bill is under consideration in New Zealand. Provisions relate to targeted methane reductions by 2030, then a 2050 reduction range. Dairy industry representatives have stated that the 2030 target is probably acceptable. There is opposition to the 2050 target range as imposing too much cost on dairy producers. Industry and government discussions will continue.