Quarterly Australian Milk Production Update – Jan ’17
Executive Summary
Australian milk production figures provided by Dairy Australia were recently updated with values spanning through the first half of the ’16-’17 production season. Highlights from the updated report include:
Low farmgate milk prices and poor weather conditions have taken a toll on Australian dairy producers throughout much of the past two years, contributing to the declines in production volumes. The Dec ’16 YOY decline in production was the smallest experienced over the past eight months, however, as a turnaround in seasonal conditions over recent months has contributed to significant pasture growth.
Recently experienced adverse conditions contributed to the Australian dairy cow herd contracting by 3.8% throughout 2016, to 1.64 million head.The YOY decline in the Australian dairy cow herd was the first experienced in the past six years, however USDA expects the Australian dairy cow herd will rebound by 1.8% throughout 2017. USDA is projecting 2017 Australia milk production will increase 3.8% YOY from the 20 year low experienced throughout 2016 as a gradual rebounding of the dairy cow herd takes place.
Australia is the fourth largest global dairy exporter, trailing only New Zealand, the EU-28 and the U.S. Of the top five dairy exporting regions accounting for over 90% of total global dairy exports, Australia accounts for 3.4% of total combined milk production and 5.8% of combined cheese, whole milk powder (WMP), butter and nonfat dry milk (NFDM) export volumes.
The bulk of Australian dairy exports are in the form of NFDM and cheese. Australia was the fourth largest exporter of both NFDM and cheese throughout 2015, accounting for 9.6% of global WMP export volumes and 9.3% of global cheese export volumes. From a global perspective, NFDM and cheese markets may be most affected by a continued decline in Australian milk production.
- Australian milk production remained lower on a YOY basis for the 15th consecutive month during Dec ’16, finishing down 4.1%. Australian milk production declined by 2.2% throughout the ’15-’16 production season and is down an additional 8.5% throughout the first half of the ’16-’17 production season.
- Low farmgate milk prices and poor weather conditions contributed to the Australian dairy cow herd finishing lower for the first time in six years during 2016, declining 3.8%. USDA projects the Australian dairy cow herd will rebound by 1.8% throughout 2017.
- Australia is the fourth largest global dairy exporter, accounting for 5.8% of combined butter, cheese, nonfat dry milk and whole milk powder exports throughout 2015. The bulk of Australian dairy exports are in the form of nonfat dry milk and cheese.
Low farmgate milk prices and poor weather conditions have taken a toll on Australian dairy producers throughout much of the past two years, contributing to the declines in production volumes. The Dec ’16 YOY decline in production was the smallest experienced over the past eight months, however, as a turnaround in seasonal conditions over recent months has contributed to significant pasture growth.
Recently experienced adverse conditions contributed to the Australian dairy cow herd contracting by 3.8% throughout 2016, to 1.64 million head.The YOY decline in the Australian dairy cow herd was the first experienced in the past six years, however USDA expects the Australian dairy cow herd will rebound by 1.8% throughout 2017. USDA is projecting 2017 Australia milk production will increase 3.8% YOY from the 20 year low experienced throughout 2016 as a gradual rebounding of the dairy cow herd takes place.
Australia is the fourth largest global dairy exporter, trailing only New Zealand, the EU-28 and the U.S. Of the top five dairy exporting regions accounting for over 90% of total global dairy exports, Australia accounts for 3.4% of total combined milk production and 5.8% of combined cheese, whole milk powder (WMP), butter and nonfat dry milk (NFDM) export volumes.
The bulk of Australian dairy exports are in the form of NFDM and cheese. Australia was the fourth largest exporter of both NFDM and cheese throughout 2015, accounting for 9.6% of global WMP export volumes and 9.3% of global cheese export volumes. From a global perspective, NFDM and cheese markets may be most affected by a continued decline in Australian milk production.