Australian fanciers are looking forward to a good year

Overall, the latest report from Dairy Australia describes that the demand for dairy will continue to grow as more countries come out of the lockdown. This is visible in, among other things, the increase in prices for various commodities, such as oil. The oil price is now as good as from the corona crisis and is at a level of about $60 per barrel. Dairy quotations are also rising, for example, the butter price is on the Global Dairy Trade today at $5.659 per tonne.

Dairy prices in Australia are expected to remain on the high side, because it does not appear that milk production will show any growth for the time being. The authors of the report expect a milk production of between 8,7 and 8,8 billion liters for this season. This is the same as a year earlier.

Challenges
By the way, not everything is smooth sailing in Australia. The main reason why milk production is not increasing is the lack of labor. As a result of all the measures surrounding the coronavirus, no workers can be brought in from abroad. This is a major challenge for many dairy farms.

Another factor is that the dairy herd in the country has shrunk. This is largely due to the fact that the price for dairy cows has been rising for years. In addition, there are also many quitting dairy farmers in the country. The combination of these three factors means that no growth can be expected in the Australian milk supply for the time being.

Positive outlook
Fortunately, there are also plenty of positive developments. Due to the good growing season last year, as a result of El Niño, farmers have enough roughage on the farm. In order to bridge the winter, therefore, it is said that not much needs to be purchased. This has a positive effect on the liquidity of the dairy farms. In combination with the higher dairy prices, Dairy Australia still expects a good year for Australian dairy farmers.