USDA: Oceania Dairy Market Overview in the begining of November 2021

Report 45 – Released on November 10, 2021

AUSTRALIA:

Australian milk intakes are lagging behind expectations for the year due to an unseasonablywet spring. Heavy rains in parts of the country have continued into the start of thecropping season. Some farmers report that harvesting forages is becoming difficult becauseof the precipitation. In places, quantities and quality of forages may be impacted. Farmersare hopeful for a dry stretch to get forages harvested, but are confident that the soilmoisture will aid in pasture growth for a strong back half of the milk production season.

Industry sources suggest dairy product demand is strong in domestic and internationalchannels. Consumer retail brands have strong sales, and contacts report the food servicesector is rebounding as some of the COVID restrictions ease across parts of Australia. Tightmilk supplies and robust dairy demand have prompted several dairy processors to increasetheir farm milk gate prices to AU$7.05 to $.7.10/kg milk solids.

AUSTRALIA SECONDARY DATA:

According to Dairy Australia. September 2021 milk production, 842.4 million liters, wasdown 2.9 percent from September 2020. Seasonal YTD milk production through September 2021,2,140.0 million liters, decreased 3.3 percent from July – September 2020. More detailedproduction data are in the table which follows.

AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN

                            July 2021 – September 2021

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

     New South Wales          291.0   +2.7            4.01    3.40
     Victoria               1,420.1   -4.1            4.01    3.44
     Queensland                82.1   -0.3            4.05    3.37
     South Australia          115.9   -2.0            3.81    3.39
     Western Australia         89.1   -4.3            3.83    3.37
     Tasmania                 141.7   -8.8            4.22    3.44
     Australia (Total)      2,140.0   -3.3            4.02*   3.43**

     *  -0.4 percent from prior year period
     **  0.0 percent from prior year period

July- September 2021 milk exports from Australia, 105,459 MT, increased 47.2 percent fromJuly-September 2020, according to Dairy Australia.January – September 2021 bulk and packaged milk exports from Australia, 224,000 MT,increased 23.0 percent from January – September 2020, according to CLAL data made availableto USDA. The main export destinations January – September 2021, quantities, and percentchange from January – September 2020, were China, 119,436 MT, +64.77 percent;Singapore,37,380 MT, +7.34 percent; and Malaysia, 14,703 MT, -16.51 percent.

NEW ZEALAND:

As the region nears peak production, milk output in New Zealand remains below expectations.Some industry contacts think the effects of the cold, wet spring may linger for anothermonth or two, but they are also hopeful that the current soil moisture may carry pasturesfurther into the summer. In addition, delays in calving may push the milk curve into a laterseason. In either case, market observers suggest overall volumes may be lower than last year’s volumes, but the overall impact is uncertain, especially with the uncertainty of NewZealand summertime weather.

Part of the market view is driven on timing, and the current view is of tight milk and dairyproduct supplies. As a result, buyers have pushed commodity prices higher in efforts toassure coverage. On the latest GDT event, only buttermilk powder prices decreased. Otherdairy commodity prices moved up significantly. The firming trends in the market areprompting industry groups to revise their milk price forecasts higher once again. Currentmilk forecasts are averaging between NZ$8.40 to $8.59. A few analysts are starting tosuggest that the milk price may be reaching the upper limit of what processors may be ableto pay for milk supplies.

Availability of agricultural workers is still worrisome to New Zealand farmers. A number ofagricultural groups have asked the government to allow for more class exceptions to themanaged isolation and quarantine program. Along with increasing the number of internationalfarm workers allowed into the country, the request suggests the approval for farm workers toquarantine in separate on-farm housing, if workers were vaccinated and following COVID-19safety protocols.

NEW ZEALAND SECONDARY DATA:

January – September 2021 bulk and packaged milk exports from New Zealand 196,000 MT,increased 13.8 percent from January – September 2020, according to CLAL data made availableto USDA. The main export destinations January – September 2021, quantities, and percentchange from January – September 2020, were China, 147,424 MT, +22.77 percent; Philippines,11,930 MT, -26.07 percent; and Taiwan, 9,614 MT, +20.38 percent.

Information for the period November 1 - 12, 2021, issued biweekly

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

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
     DMN MARS (My Market News): https://mymarketnews.ams.usda.gov

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