News Milk production
Milk supply 'Down Under' falters considerably
Milk production in New Zealand and Australia has taken off quite a bit. Moreover, the contraction appears to be structural. In Australia, the country's largest milk processor recently announced plant closures.
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New Zealand dairy farmers produced 1,32 million tonnes in August, down 4,8% on the same month last year. This means that the deficit is slightly smaller than in July, when the contraction was still more than 5%. Nevertheless, we can conclude that the milk supply figures of the world's largest dairy exporter are under pressure. This while milk prices, just like in Europe, have risen considerably. Moreover, Fonterra has indicated that the dairy market is solid, also further afield.
Seasonally, milk production in New Zealand is increasing again, although spring is still a long way off. Snow is even predicted in some parts of the country in the coming days. It has also been very wet this winter.
Australia
Milk production is also faltering in Australia at the start of the new season. In July production amounted to 564.000 tons. This is a decrease of 8,3% compared to the same level last year. This seems to continue the downward trend that was already visible last season. Especially because the shrinkage is visible in all states, including Victoria (-7,9%) where the majority of the milk is produced. Milk production in Australia is also hampered by wet weather conditions.
Canadian milk processor Saputo announced earlier this month that it would be closing factories in Australia, where the company is the largest processor. The reason for this is that the decline in milk production appears to be structural. The exact details have yet to be announced.