Report 29 – Released on July 22, 2021

AUSTRALIA:

At only a few weeks into the new Australian milk season, it is hard to tell what the yearwill hold. But that said, industry participants expect stable domestic dairy demand andrelatively supportive global fundamentals in the first half of the year will get the milkseason off to a good start. If food service demand can return to pre-pandemic levels, thedomestic sales may help further support market prices. In the previous weeks, some dairycooperatives and processors increased the offering prices made to farmers to assure thesupply of milk will be sufficient to meet processing needs.

Farmers and others within the dairy industry expect 2021/22 Australian milk production to becomparable to previous years. With positive opening milk prices and less reliance onpurchased feed, farmers may start the year on a better footing. However, strong land values,higher beef prices and difficulty in finding enough farm workers may still persuade somefarmers to exit. In addition, increasing COVID cases in some nearby export markets maystymie some of the emergent market optimism.

NEW ZEALAND:

The milk season in New Zealand is underway as calving has started in parts of northern NewZealand and is making its way southward. For the most part, dairy regions have had favorableweather leading into the new milk season. However, heavy rains in parts of western NewZealand have led to flooding. Significant losses of cattle and damage to pastures have beenreported but it is not clear how much impact this will have on the New Zealand milk shed.

Industry analysts expect a strong milk season with farmgate prices to hold near 8.00 NewZealand dollar/KG milk solids. However, lower results from the recent GDT event may prompt afew analysts to shift the price forecast slightly lower. Although offer volumes were shiftedlower in an effort to stabilize commodity prices, contract prices edged lower for most ofthe commodities. Industry contacts expected a seasonal slowdown, but increased numbers ofCOVID cases across Southeast Asia have refueled enough uncertainty to give buyers pause.

A number of farmers and farm groups organized protests across New Zealand in efforts tovoice their opposition to proposed governmental regulations.

Information for the period July 12 – 23, 2021, issued biweekly

Secondary Sourced Information

:July 2020 – May 2021 seasonal milk production in Australia increased 0.8 percent from July2019 – May 2020, according to Dairy Australia. May 2021 milk production, 670.6 millionliters, was up 2.6 percent from May 2020. More detailed production data are in the tablewhich follows.

 AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN

                            July 2020 – May 2021

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

     New South Wales          988.8  +1.9            4.24    3.43
     Victoria               5,243.6  +0.6            4.46    3.49
     Queensland               284.9  -2.2            4.21    3.43
     South Australia          462.4  +2.1            4.16    3.43
     Western Australia        332.2  -0.6            4.14    3.28
     Tasmania                 919.9  +1.4            4.92    3.85
     Australia (Total)      8,231.9  +0.8            4.44*   3.51**

     *  -0.8 percent from prior year period
     ** -1.2 percent from prior year period

July 2020 – May 2021 milk exports from Australia 253,707 MT, increased 16.9 percent fromJuly 2019 – May 2020, according to Dairy Australia.

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

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