Report 27 – Released on July 8, 2021

AUSTRALIA:

July 1 marked the opening of the new milk season in Australia. Obviously, seasonal milkproduction will only increase from here. For past seasons a graph of production shows anearly vertical line rising to the peak in October. There will be abundant milk flowing intoplants rather quickly.

Australian milk producers tend to contract seasonally for their milk output. During the last few weeks leading into the new season something of a bidding war broke out. Major processorsbegan lifting offering prices to be sure they have enough milk geographically located fordairy manufacturing plants they operate.

A large dairy cooperative increased the offering price twice after the initial price wasannounced. The coop’s average national price as reported by NZX is 6.96 Australiandollars/kg milk solids. As a country with huge land area and climatic variety, pricesoffered in varied regions do differ from other regions. Among the highest prices noted, aprocessor in northern Victoria and southern New South Wales reportedly offered 7.50Australian dollars/kg milk solids.

NEW ZEALAND:

New Zealand sources believe that supplemental feeding helped to boost New Zealand milkproduction in the season just ended. A current concern for the new season is the likelihood that migrant dairy workers will not be able to come into New Zealand to work for a number ofmonths due to COVID-19 related travel restrictions. The worry is that dairy owners facinglabor shortages might adjust for lower milk production.

Sources with NZX indicate that some banking analysts continue to believe that new seasonmilk prices in New Zealand will end up in the 8.00 New Zealand dollar/KG milk solids – 8.20range. The lower results from the GDT event earlier this week did not cause the seasonalforecasts to be altered.

May 2021 New Zealand milksolids reported by DCANZ, and NZX, 99,675 million kg, are up 9.4percent from May 2020 milksolids. Season to date milk solids through May 2021 increased 2.7percent from last season through May 2020.

Secondary Sourced Information:

May 2021 New Zealand tonnage reported by DCANZ, 974,000 MT, and NZX are up 7.6 percent fromMay 2020 tonnage. Season to date milk tonnage through May 2021 increased 2.6 percent fromlast season through May 2020.

January – May 2021 bulk and packaged milk exports from New Zealand 116,000 MT, increased30.1 percent from January – May 2020, according to CLAL data made available to USDA. Themain export destinations January – May 2021, quantities, and percent change from January –May 2020, were China, 91,408 MT, +55.43 percent; Taiwan, 6,024 MT, -8.22 percent; andPhilippines, 5,656 MT, -34.49 percent.