Report 39 – Released on September 26, 2019

AUSTRALIA:

As Australia moves closer to the seasonal milk production peak, expected in a few weeks, there is some tempered optimism. Milk pay prices are at a level that seems to be encouraging some producers in areas with less need to purchase water and feed, to work toward higher milk production. Competition among dairy processors for milk has led to offering higher milk pay prices. There also is some evidence of cows being moved from northern regions to southern regions with less need for irrigation. That too, could help boost milk production, or perhaps more realistically, slow the decline.

So much depends on weather and water. Continued dry conditions will depress milk production in some regions. There is a more hopeful outlook for parts of Victoria, Gippsland, Tasmania, and Western Australia. Overall, observers note that Australia will remain a net surplus manufacturer of dairy products. Disappointing milk supplies however, may limit the volumes of net exports for the season.

NEW ZEALAND:

August 2019 New Zealand milk production reported by DCANZ was 1,394 million MT, up 0.8 percent from August 2018 milk production, 1,383 million MT. August 2019 milk solids, 119,066 million kg, are up 2.2 percent from August 2018, 116,478 million kg. New Zealand milk production is near the seasonal peak.

The previously delayed announcement by a large dairy cooperative in New Zealand of final financial results for the recently ended milk season is expected this week. That will result in determination of the final milk price for last season. Many observers are not expecting particularly good results. Recent news of large write downs lingers. The delay in reporting also caused concerns. Another factor is that some agricultural lenders in New Zealand have been striving to reduce financial exposure to agriculture. That has made credit tighter and resulted in pressure to accelerate repaying principal.

Some observers report a recent cold snap in New Zealand, so it still feels quite wintery. Pastures still seem to be in good shape, so they expect September to be decent in terms of production when final results are released.

 Information for the period September 16 - 27, 2019, issued biweekly

     Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: Eric.Graf@usda.gov

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