Australia's milk production benefits from precipitation

Rabobank expects Australian milk production for the 2020/21 season to exceed 3 billion liters for the first time in 9 years. The dairy sector in the country has been benefiting from persistent rainfall for several months, which has a positive effect on milk production.

The Australian milk production is expected to increase by 2,8% in the coming season compared to the previous milking season, Rabobank reports. If this growth is indeed achieved, milk production will exceed 3 billion liters for the first time in 9 years. Last season Australian dairy farmers produced 8,775 billion liters and no new 'spring fush' record has been broken since 2017/18.

Precipitation
Over the past 3 years, milk production has suffered greatly from the drought. According to dairy analyst Michael Harvey, that tide has now turned. The weather conditions have improved in the past 9 months. The effect of this was reflected in the second half of the 2019/20 milking season. From December 2019, milk production started to recover. Production growth is led by the provinces of Tasmania and Gippsland.

Higher production also means more income for dairy farmers. Rabobank expects the calculated milk price of $6,30 per kilo of milk solids to remain. This gives dairy farmers a little more breathing space when it comes to weighing costs and yields.

dairy market
Exports show a decline of more than 7% in volume as a result of the drought. In particular, the export of skimmed milk powder (-29%) and butter (-44%) fell sharply. Now that production is increasing, it offers the exporters room to look for new or additional markets. This will not be an easy quest due to the corona crisis. The food service is still not running optimally and that recovery is expected to take some time. Especially because Australia first seemed to get away with corona infections, but that has now changed.

Jorine Cosse

Editor at Boerenbusiness who studies the dairy, pig (meat) and feed markets. Jorine analyzes the roughage market on a weekly basis and periodically the compound feed market.

j.cosse@boerenbusiness. Nl

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