Report 17 – Released on April 29, 2021

AUSTRALIA:

July 2020 – March 2021 seasonal milk production in Australia, increased 0.7 percent fromJuly 2019 – March 2020, according to Dairy Australia. March 2021 milk production, 628.4million liters, decreased 1.8 percent from March 2020. More detailed production data are inthe table which follows.

AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN

                            July 2020 – March 2021

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

     New South Wales          824.4  +2.0            4.14    3.35
     Victoria               4,446.4  +0.4            4.55    3.52
     Queensland               237.3  -3.4            4.16    3.43
     South Australia          383.6  +2.5            4.02    3.37
     Western Australia        273.5  -0.9            4.08    3.20
     Tasmania                 772.3  +1.7            4.72    3.71
     Australia (Total)      6,937.5  +0.7            4.44*   3.49**

     *  -0.1 percent from prior year period
     ** -0.8 percent from prior year period

Australian dairy producers continue to struggle with labor shortages. The recent opening ofthe so-called trans-Tasman travel bubble allows quarantine free flights between Australiaand New Zealand. In response, a new online advertising campaign seeks to recruit workersfrom New Zealand to go to Australia to work on farming operations. Free airfare and goodwages are promised. The reaction in New Zealand is said to be enhanced efforts to retainexperienced agricultural workers.Australian dairy producers and manufacturers continue to express apprehension over thedownward cycle of trade relations between China and Australia. Recent action by thegovernment in Australia cancelling Victoria’s Belt and Road deal with Beijing has beenviewed in Beijing as provocative. The deal was intended to promote trade activity byinfrastructure improvements. Some Australian dairy officials are concerned that Beijing mayretaliate in ways that make exporting Australian dairy products to China more difficult.

NEW ZEALAND:

March 2021 New Zealand milksolids reported by NZX are up 8.7 percent from March 2020milksolids. March 2021 milk production on a tonnage basis is up 9.8 percent from March2020. Season to date through March 2021 milk solids increased 1.8 percent from last seasonthrough March 2021. Seasonal milk tonnage is up 1.6 percent through March 2021.

New Zealand dairy officials certainly welcome the March milksolids increase. Nevertheless,some caution as to excessive exuberance regarding the monthly increase compared with oneyear ago. March milk production in New Zealand is quite diminished from the peak month,October. The typical low month for production, June, is not far off. The key point is thatso late in the milk season a monthly YOY increase is not likely to significantly change theannual results very much.

New Zealand commodity exchange sources attribute the March 2021 milk production increase tofavorable pasture conditions during February into March. The increase was skewed toward theNorth Island. Another factor making March 2021 look good is that during March 2020 theNorth Island was suffering from drought, which suppressed milk production.

Some Waikato dairy producers on the upper North Island are said to have reported twice asmuch milk production during this season through March 2021 as last season through March. Some Taranaki dairy producers on the west side of the North Island also report quitepositive increases. Waikato and Taranaki are the two primary milk producing areas on theNorth Island.

Recent rain on both the North island and South Island has helped maintain pastureconditions. Heavy rain is forecast for all areas in the coming week. That will help theSouth Island, in particular, even up with the North Island as to soil moisture.

Dairy trading in New Zealand is off to a delayed start this week. Anzac Day is officiallycelebrated Monday. This is the day of remembrance of losses sustained by New Zealand invarious wars. For some people the three-day holiday weekend is stretched further into lastweek Friday.

A large dairy cooperative in New Zealand has invested in a foodservice application center insouthern China. This initiative reflects efforts to develop innovative dairy products tosupply coffee shops, restaurants, and food stores. Sales of value added dairy based productsinto China have been very profitable.

Information for the period April 19 - 30, 2021, issued biweekly

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

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