When fires started burning in Australia last fall, few dairy operators expected they would still be burning in January. Some dairy operators estimate that about 70,000 dairy cows were killed.
Cows in areas threatened by fire in some cases, can be moved to safer areas. Options are limited because cows need a place where there is food, water and the possibility to milk them.
As 2019 ended, strong hay demand in Australia has become even stronger. Continuing drought in many areas, coupled with fires burning since October, contribute to this situation.
New Zealand-0.4%% milk production
New Zealand milk production in December 2019 is down 0.5 percent from December 2018. This results in current season milk production through December being 0.43 percent lower than this point last season. However, milk solids production is still up 0.4 percent compared to June – December 2018.
This season weather in New Zealand has been dry, with less rain than normal, negatively affecting not only milk production but also supplementary crops. That could lead to some producers having to buy imported feed at current higher spot prices, adversely affecting margins. There is still time for rain to help, but for now, uncertainty prevails.
Dairy Commodities Prices
The dairy commodities prices are increasing, due to the seasonal decline in milk production and a good demand.
Production of Butter and Cheddar is focused on filling existing deals, leaving the stocks mostly steady, while there are limited stocks of SMP to meet demand from buyers.
Manufacturers tend to favour WMP production over other dairy products; nevertheless, a decline in production has been recorded.
The Global Dairy Trade of January 21 has confirmed an increase in prices, recording an overall variation of +1.7% compared to the last GDT event.
- Assessments about market trend are expressed in US$;
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team