Report 51 – Released on December 22, 2021

AUSTRALIA:

Some Australian dairy producers continue to endure very wet weather. This has adverselyimpacted milk output. Insiders are quick to point out that season over season comparisonsmay be misleading because last season generated very good outcomes. New South Wales recentlyexperienced severe flooding. Many spring crops were decimated. Dairy output is expected toreflect a downturn when data for recent weeks becomes officially reported. Victoria andWestern Australian dairy producers have been struggling with sporadic rain, less than theywould like. This too has nicked milk production.

NEW ZEALAND:

Coming off a cool and wet summer, New Zealand pastures are in good condition heading intoWinter. Recent rain has helped maintain pasture conditions. Even so, milk production thisseason has been below YTD production one year earlier. New Zealand dairy insiders expectthat when December milk production is reported, results will still lag the previous year.December will be the seventh month of the season. Expectations are that January and February2022 production may be close to those months in 2021. Thus few if any people expect enoughincreased milk production in the waning portion to overcome waxing seasonal lowerproduction. All of this points toward seasonal production continuing to lag the last season.

Several factors are mitigating the positive impact of healthy pastures. Milk prices earlythis season have not been terribly motivating for many dairy producers to aggressivelystrive to increase milk production. Some input costs have risen decisively. Urea inparticular is cited. That cost factor is referenced as a factor keeping a lid on milkproduction.

Worker shortages and inexperience remain challenges. COVID factors have kept potential dairyworkers out of New Zealand. While sources note that plans are shaping up to allow about 200 workers to enter New Zealand, any potential benefit may lag. First, it is already well intothe season. Then there may be a training lag until the new workers become fully effective.So far it is speculative which workers would migrate in and thus, what skills they have ordon’t have. There is also a question about providing adequate housing. There is also thequestion as to how much benefit 200 more workers will bring. Moreover, uncertainty nowarises from a new announcement mid-week that New Zealand will now extend border crossingrestrictions.

Currently the worker shortage has been addressed by inducing younger and less skilled NewZealand men and women to step up. That has led to a number of tractor mishaps attributed toinexperience according to sources.