Period: April 13 – 24, 2020
Australia is moving toward the end of the current milk production season. After a challenging start to the season, milk production has been steadier in recent months, even if lower than last season so far. Rain in many areas has helped to partially counter the early season impact of drought and fires.
Some operators say that COVID-19 will not likely be a factor affecting the supply of dairy products. Yet to be determined is the impact of face-to-face trade activities, shipping, and distribution. New cases of COVID-19 have been dropping in Australia, as a result, the Government is considering relaxing some restrictions next week.
A primary challenge for the processing industries is to satisfy the consumer demand of dairy goods. Some dairy products which had been made for food service will remain unsold; this aspect complicates the product management for the items closer to the expiration date.
In New Zealand, Milk production for March 2020 is down by -1.9% compared to March 2019. The overall variation for the period June-March is -0.55% compared to the same period of the previous season, but it is still steady in Milk Solids.
The trend of dairy product exports in New Zealand is a determinant factor to maintain milk pay prices. There is concern about the spread of COVID-19 in the U.S. and European, considering that could affect dairy markets and may impact New Zealand’s export opportunities.
Some economists are concerned about the possibility of lower milk pay prices at the beginning of the next season. In addition, the dry weather continues to worry the operators.
Prices of Dairy Commodities
Butter prices in Oceania are slightly lower. European pricing remains significantly lower than Oceania, inviting some buyers to make purchases in Western Europe.
Cheddar prices are higher. This increase is mainly due to the good demand for the product and the high percentage of stocks already commissioned.
The Milk Powder market in Oceania has a higher supply than demand for WMP and a low competitiveness compared to European prices for SMP, this has led to a decrease in the prices.
The price trend of dairy products is confirmed by the results of the last GDT event of April 21, which shows an average overall change of -4,2% compared to the previous event.
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team