Report 27 – Released on July 3, 2019

AUSTRALIA:

     AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN

                            July 2018 - May 2019     May 2019

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

     New South Wales         928.6      -10.5           4.12      3.36
     Victoria              5,042.3       -9.2           4.48      3.45
     Queensland              331.9      -10.2           4.18      3.37
     South Australia         461.6       -0.9           4.14      3.34
     Western Australia       346.2       -2.9           4.18      3.27
     Tasmania                866.9       +0.4           4.88      3.76
     Australia (Total)     7,977.4       -7.7           4.43*     3.46**

     *  +1.4 percent from prior year period
     ** -1.1 percent from prior year period

     Data from Dairy Australia

Reportedly many Australian dairy producers are giving a large Australian dairy cooperative notice that for the new season which began July 1, they are sending their milk elsewhere. Producer notices may run until about mid-July. This will impact the size of milk pools and could impact processing plant operations. The new array of milk pools is still developing.

NEW ZEALAND:

May 2019 New Zealand milk production reported by DCANZ was 0.868 million MT, down 0.1 percent from May 2018 milk production, 0.869 million MT. May 2019 milk solids, 87.839 million kg, are down 1.1 percent from May 2018, 88.812 million kg.

Sale of a large dairy processor in New Zealand to a subsidiary of a Chinese company, which had been announced recently, is the focus of renewed calls for government intervention by some dairy producers still owed milk pay checks from the firm being sold. Financial difficulties of the New Zealand firm were the essential reason for the sale. A group of dairy producers has asked the government to delay closing the sale until the producers are paid. The producers believe that as unsecured creditors, they would be forced to make involuntary loans to induce the sale, if they are delayed in receiving payment. Another reason mentioned is that the producers feel their leverage to get paid will lessen once ownership leaves New Zealand for China.

Other critics of the sale are concerned that this is a big step further reducing New Zealand dairy producer ownership of New Zealand dairy processing. Critics argue that golden parachutes offered to management of the cooperative being sold biased an objective analysis of merits and demerits of sale terms as well as longer term potential effects. Voices in the dairy industry believe the industry will be better served by keeping control in New Zealand and selling dairy products to customers, rather than by selling the New Zealand processing industry to foreign customers.

Information for the period June 24 – July 5, 2019, issued biweekly

 Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: Eric.Graf@usda.gov

     Additional Dairy Market News Information:
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