Period: April 27 – May 8, 2020
Australia+7.1% milk production March 2020 y-o-y
In Australia, March 2020 milk production is +7.1% higher than March 2019. Milk production for the period July 2019 – March 2020 remains negative, down by -1.8% compared to the corresponding previous period.
Much of New Zealand has had heavy rain over the past few days, but it is still quite dry. Many operators expect that milk production is trending down in April, while the rest of the milk season is projected to be back to more normal levels, either flat on last year or up slightly.
New Zealand is moving away from previous COVID-19 restrictions, thanks also to the fact that for some days there have been no new positive cases. Many restaurants and fast food outlets are now open for delivery or takeout.
Prime Minister Jacinda Ardern has announced that on May 14th, New Zealand will further ease its COVID-19 restrictions, allowing domestic travel to resume and the re-opening of restaurants, shops and playgrounds. There are only 74 active cases of COVID-19 in the country, with just two people in hospital.
Dairy manufacturing plants are mostly not able to operate at full capacity due to the social distancing measures.
Prices of Dairy Commodities
Oceania butter prices are decreasing. The fall in prices is due to an unexpected increase in supply and lower prices in Europe. The decrease is confirmed by the last event of the GDT on May 5th, where Butter and AMF recorded a price variation respectively of -10.3% and -2.4%.
Cheddar Cheese prices moved down. Cheddar production is increasing, with more milk being processed into cheese. Following the relaxation of the Covid-19 restrictive measures in Oceania and Asia, Cheddar’s demand is returning to normal levels. Prices remain profitable and it is not a problem for some producers to increase their stocks. The GDT auction on May 5th recorded a decrease of -6.8%.
Milk Powder prices are steady to slightly lower. Oceania SMP prices are higher than competitors, leading the Buyers willing to buy in Western Europe, where prices are lower and SMP in storage are elevated. In addition, given the lower profit margins linked to the sale of WMP, more milk is destined for processing into Skimmed milk powder.
Operators hope that this trend will strengthen WMP’s prices in the short term. The price trend of WMP in Oceania is very important as it strongly influences the price trend of milk.
The last Global Dairy Trade recorded a positive change for Milk Powders, +0.1% for both SMP and WMP. Overall, the average price of dairy products fell by -0.8%.
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team