Milk production rises in New Zealand in the new season [News Oceania n°12/2020]

Period: August 3 – 28, 2020

In Australia, the agricultural year July 2019 – June 2020 ended with a substantially stable milk production (-0.2% year-over-year).

The new season has begun in July with a mild winter. The recent rainfall has supported the growth of fodder and hay. At the moment, farmers are benefiting from increased feed availability and the fall in the price of hay.

The trade tensions between Australia and China that arose after the spread of Covid-19 are affecting the agri-food sector. Beijing has announced the application of tariffs on Australian exports of barley and restrictions on beef shipments.
In the dairy sector, the position of the Australian Government has led the Chinese Mengniu Dairy to give up the acquisition of the local company Lion Dairy.

New Zealand+3.2% milk production June-July 2020 y-o-y

In New Zealand, milk production in July increased (+4.4% y-o-y). Overall, the new agricultural season, which began in June, recorded a variation of +3.2% compared to June-July 2019.

Price of Dairy Commodities

In Oceania, Butter prices are decreasing. Production is increasing seasonally, as are sales. The price is also attractive for buyers who normally buy in the European market.

For Cheddar Cheese, although production is increasing, prices are mostly stable. The very short-term contracts requested by some buyers helped to support the price level.

Skim Milk Powder (SMP) prices in Oceania strengthened. The magnitude of the increase surprised several regional dairy operators, since SMP production is increasing. However, some buyers expect the pricing will not be sustained in the near future.

Prices of WMP are decreasing. There is uncertainty in the market, and analysts’ opinions differ. According to some analysts, several major WMP buyers have already covered their needs. Others believe seasonal demand for WMP will be very good and that the buying slowdown is only temporary. However, the season has just begun and the answer to this question will be clearer in the next updates. - New Zealand Export WMP – New Zealand Export WMP

The results of the last GDT event of the 1st of September confirm this market trend, recording an overall price variation of -1.0%. Negative changes have been observed for Butter (-1.2%), AMF (-0.5%), Cheddar (-0.4%) and WMP (-2.0%). A positive change, instead, for the SMP (+1.8%). - Australia Milk Production – Australia Milk Production

– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team

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The team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.

Posted in Australia_, New Zealand, News Oceania EN