Drought a thing of the past for dairy sector 'Down Under'

Unlike previous years, the spring (September to November) was fantastic for dairy farmers and arable farmers. Thanks to rainfall, crops were able to grow well and dairy farmers were able to rebuild stocks that had dwindled considerably in recent years. Dairy states such as Victoria and New South Wales in particular, which together account for 80% of production, were hit hard. A welcome treat after years of drought.

Due to rainfall, the water basins are well filled again. The high grain prices of recent years have fallen back to acceptable levels and with them the feed prices. The availability of roughage has also increased, meaning that the hay price has been below the 5-year average since May. Last year, (dairy) cows were culled due to shortages.

Soaking wet summer predicts
The rainfall means that milk production is recovering, and the upward trend has started again since the beginning of this year. Australian milk production is expected to reach 9,2 million tonnes this year. The milk supply is expected to grow to 2021 million tons in 9,4, provided there are no weather extremes. This brings the milk supply to a normal level. Although the spring was hopeful, the summer period has yet to come Down Under. The question is of course what the summer months will bring.

Last Christmas, Australia was ravaged by intense forest fires. With the past few years still fresh in our minds, a new drought period is likely. Yet the opposite may be true. The Australian Bureau of Meteorology's long-term forecast calls for a soaking wet summer. In states such as New South Wales, Victoria and Queensland, major flooding is even expected. The predicted change in weather is related to tropical cyclones due to La Niña.

Cheese production is increasing
Dairy farmers in the country probably have a smile on their faces at these reports. After all, the drought ruined their business operations, although flooding is also not desirable. The extra milk production, which results from better weather conditions, puts pressure on dairy prices. Especially now that the corona crisis is affecting domestic sales.

Nearly 40% of milk production goes into the cheese bin and this percentage is growing. It is a trend that has been going on for some time and has been reinforced by the corona crisis. In 2019, production is reported to be 385.000 tons and will grow to 2021 tons in 395.000, the highest volume since 2002. Because Australian cheese consumption is more or less stable, the country will export more. This year Australia exported around 160.000 tonnes, mainly cheddar.