Report 33 – Released on August 19, 2021

AUSTRALIA:

Through the early stages of the Australian milk production season, farmers have been able tomaintain a level of optimism. Farmers have relatively good weather, reasonable input costs,and favorable opening milk prices as the season kicks into gear. While still early in themilk season, market analysts expect that Australian milk production may grow for the 2021-22 milk season. However, higher beef prices may slow the rebuild of dairy herds. Andcurrently, farmers face the challenge of finding enough trained workers.

The Australian government has awarded funding to the dairy industry to work to reducetechnical trade barriers, such as product testing, shelf life and labeling. The governmentand industry stakeholders will work to expand opportunities in Southeast Asia with thefunding.

July 2020 – June 2021 milk exports from Australia 280,224 MT, increased 14.8 percent fromJuly 2019 – June 2020, according to Dairy Australia.

January – June 2021 bulk and packaged milk exports from Australia, 128,000 MT, increased13.8 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, 58,241 MT, +43.39 percent; Singapore, 23,937 MT, +1.14 percent; and Malaysia, 11,009 MT, -4.14 percent.

NEW ZEALAND:

New Zealand market observers are beginning to get a view of how the 2021-22 milk season maytake shape. Farmers on the North Island indicate that milk production appears to be ahead oflast year. Cows and pastures are both in good condition as the milk harvest begins. So far,the weather has been favorable for pasture growth and cow comfort, however farmers alsorecognize that a stretch of cold weather could set the emerging milk harvest back. On theSouth Island, pasture conditions are average, but with the later calving dates, it is stilltoo early to tell how milk production will build.

As Delta variant COVID cases increase, there are renewed concerns of the potential impactson dairy markets. New Zealand is once again under a level 4 lockdown, the highest alertlevel. And outbreaks across Southeast Asia are creating other regional lockdowns. Industrycontacts expect these new outbreaks and health safety measures may impede dairy demand anddistribution, but it is hard to tell to what extent. The last time New Zealand entered intoa level 4 lockdown was as the 2020-21 milking season was winding down.

Trade officials from New Zealand and the United Kingdom are working to develop a free tradeagreement between the two countries. Kiwi dairy officials suggest the goal is to have anagreement in place that is similar to the recently concluded FTA between Australia and theUK. That agreement eliminates tariffs as the end goal. While it may be a few months beforeand agreement can be reached, both sides indicate negotiations have been promising.