Report 31 – Released on August 5, 2021

AUSTRALIA:

Australian milk production is starting the season off well, with good pasture conditions andplentiful feed stuffs. The main dairy regions have received normal to above-normal rainfallso far this year. In addition, farmers are optimistic that milk pay prices may remain atprofitable levels for the coming year. According to the Dairy: World Markets and Tradereport by the USDA Foreign Agricultural Service, the 2021 milk production forecast isrevised down to 9.2 million tons, a decrease of 2 percent over 2020. Much of the change isattributed to a decrease in dairy cow numbers.

NEW ZEALAND:

Calving is well underway across much of New Zealand. New season milk production is coming inwith the North Island leading the way and contributing to the preliminary seasonal YOYincreases in milk production. Aside from regional flooding in parts of the island nation,weather has been favorable for pasture growth. Early forecasts suggest rainfall to be atnormal or slightly above normal levels for the next few months, which will give shape towhat the season will be. In New Zealand, 60 percent of the annual milk production isproduced between August and December. According to the Dairy: World Markets and Trade reportby the USDA Foreign Agricultural Service, the 2021 milk production forecast is revised up to22.4 million tons, an increase of 1 percent over 2020. The current forecast for the 2021-22milk season is +1.6 percent. That said, a lot can change so early in the season.

Falling prices at the GDT are putting pressure on milk price forecasts. In particular, wholemilk powder prices have fallen the last two trading events following reductions in volumesoffered. The reduced WMP volumes were intended to provide some support to GDT market prices.

Current milk price forecasts following the latest GDT event are NZ$7.47-$8.05/kgMS anddepend on the NZ/US exchange rate and potential changes in commodity prices. The emergingdairy season will have a dramatic effect on shaping milk prices moving forward and howaggressive buyers will need to be. While demand for dairy products is currently present,buyers are hesitant to pay premium prices right now.

June 2021 New Zealand milksolids reported by DCANZ and NZX are 20.642 million kg, comparedto 20.321 million kg in June 2020.

January – June 2021 bulk and packaged milk exports from New Zealand 133,000 MT, increased21.9 percent from January – June 2020, according to CLAL data made available to USDA. Themain export destinations January – June 2021, quantities, and percent change from January –June 2020, were China, 101,090 MT, +38.06 percent; Taiwan, 7,297 MT, +6.71 percent; andPhilippines, 6,751 MT, -33.00 percent.

  Information for the period July 26 -  August 6, 2021, issued biweekly

     Published by:
     Dairy Market News - Madison, WI
     MIKE BANDLI, (608)422-8592
     Email: mike.bandli@usda.gov

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