Report 39 – Released on September 30, 2021

AUSTRALIA:

With relatively strong farm milk prices and low input costs, Australian dairy farmers remainconfident that the new milk season may be profitable. After a wet start to the season slowedmilk flows, many of the dairy regions have had drier weather, helping improve pasture andmilk production conditions through the early spring. As the weather warms, farmers expectmilk production to further increase. According to Dairy Australia’s September 2021 DairySituation and Outlook report, the Australian dairy industry is targeting a 0 percent to 2percent increase in milk production this season.

NEW ZEALAND:

New Zealand milk production is looking to rebound from an underperforming August. Industrycontacts suspect a wet, cold spring and delays due to breeding challenges last season mayhelp explain at least part of the suppressed milk output. Calving has been slower thannormal in parts of the country, and heavy rains are still hampering the launch of the milkproduction season. National weather forecasts predict drier conditions to prevail once thecurrent weather system passes. Farmers expect that once that happens, pasture growth andcondition will likely take off, with ample soil moisture and optimal growing conditions.

Milk powder prices moved higher, and butter and cheese prices lower at the latest GDT event.Industry analysts suggest the moves were about as expected for the volumes offered at theauction. Demand for dairy products is still steady to stronger, and milk supplies are stilltight. Firm dairy markets are helping support milk price forecasts near the NZ $8/kg milksolids mark.

NEW ZEALAND SECONDARY DATA:

August 2021 New Zealand milk solids reported by DCANZ and NZX are 119.435 million kg,compared to 124.643 million kg in August 2020. According to CLAL, New Zealand season-to-datemilk production through August 2021 is 1.936 million MT, compared to 1.984 million MT June through August 2020, down 2.42 percent.

January – August 2021 bulk and packaged milk exports from New Zealand 173,000 MT, increased15.8 percent from January – August 2020, according to CLAL data made available to USDA. Themain export destinations January – August 2021, quantities, and percent change from January– August 2020, were China, 130,251 MT, +25.98 percent; Philippines, 10,849 MT, -23.21percent; and Taiwan, 9,033 MT, +17.94 percent.