Report 51 – Released on December 17, 2020

AUSTRALIA:

July – October 2020 milk production in Australia, October being the fourth month of the new season, increased 1.6 percent from July – October 2019, according to Dairy Australia. More detailed production data are in the table which follows.

AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN

                            July – October 2020

                            Million Percent Change   Percentage
     State                  Liters  From 1 Year Ago  Milkfat Protein

     New South Wales          378.2  +0.8            3.96    3.30
     Victoria               2,109.9  +1.8            4.06    3.40
     Queensland               109.5  -5.1            3.98    3.31
     South Australia          167.7  +4.3            3.77    3.32
     Western Australia        127.2  -0.2            3.79    3.35
     Tasmania                 274.2  +3.1            4.15    3.43

* +5.4 percent from prior year period

** +1.0 percent from prior year period

This milk season began with the benefit of warm and wet weather, which spurred good pasture growth. Dairy producers in turn, have benefitted from eased hay and grain prices. Production conditions remain generally good. However, even with season to date milk production through October being positive, and July, August and September YOY production percentage changes each being positive, October YOY declined -0.3 percent. Observers in Australia cite factors such as a smaller national herd, fewer dairy farms, and less hired labor availability. With seasonal production now moving down, monthly production outcomes become more a matter of concern. The decent early season gains provide a cushion. The October YOU production decline is slight. Results for November are awaited as a possible signal of what to expect seasonally moving forward.

Another simmering issue in Australia is political and trade relations with China. There has been some political friction of late. The potential for spill over into Australian exports to China are in the forefront of concerns. This remains an additional uncertainty for the future of the dairy economy in Australia.

NEW ZEALAND:

Dairy producers in New Zealand received welcome December news last week in advance of the holiday season. A large New Zealand dairy cooperative increased the projected low end of the seasonal milk pay price. The new projected price is NZ$6.70 – NZ$7.30 per kilogram of milk solids. The previous projection had a low range price of NZ$6.30. Officials attribute the increase to early season strength in exports, not only to China, but Asia more widely. Whole milk powder exports, in particular, are in good demand. The export strength is expected to continue based on ordering so far. Weather has been decent, but there is always some nervousness about the potential for dry conditions setting in. As 2020 nears an end, there is some comfort in seasonal results so far.

Information for the period December 7 - 18, 2020, issued biweekly

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

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
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