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Australian milk production lowest in two decades


In its December Agricultural Commodities report, the Australian Bureau of Agricultural and Resource Economics and Sciences has forecast Australia’s dairy cow herd to fall by 3 per cent to 1.48 million head and milk production by 4 per cent to 8.91 billion litres.

“If realised, this would be the lowest level of production in over 20 years,” ABARES said.

The last time milk production fell below 8.9 billion litres was 1995-96.

The forecast fall in milk production during 2018-19 was largely attributed to the ­nation’s dairy cow herd ­decreasing by 81,000 cattle from an estimated 1.56 million on June 30 this year.

Milk yields have been forecast to rise 1.2 per cent from 5951 litres a cow in 2017-18 to 6020 litres this season.

ABARES said the national farmgate milk price was expected to rise slightly from 46 cents a litre to 46.6 cents/litre.

That was still well above the 40.9 cents a litre paid in 2016-17.

“An assumed fall in the Australian dollar and strong competition among processors for milk supply are expected to support milk prices (in 2018-19),” the report said.

Globally, higher milk production in New Zealand and the US should result in lower world prices for cheese, whole milk powder and butter.

ABARES has forecast butter prices to fall 18 per cent this season to end at $US4820 a tonne in June. Whole milk powder prices were tipped to fall 6.5 per cent to $US2922 a tonne, while cheese was expected to decrease 4.4 per cent to $US3860 a tonne.

Skim milk powder prices were the only bright spot, with ABARES tipping them to rise 1.7 per cent to $US1970 a tonne by the end of June next year.

The SMP stockpile in the European Union still weighed over the industry but had halved from January’s level of about 370,000 tonnes.

“Sales are now occurring twice monthly, but it is likely to take at least another 12 months to eliminate the stockpile,” ABARES said.

“A faster than expected ­reduction in the stockpile would place greater short-term down­ward pressure on skim milk powder prices.”

The grim outlook comes as National Australia Bank released its December commodity wrap this week.

NAB agribusiness economist Phin Ziebell said November dairy prices were 5.5 per cent lower than the previous month.

“The December Global Dairy Trade Auction saw the best result in months, although it continues to disappoint and it’s difficult to see any major improvements in the short term,” Mr Ziebell said.

Source: weeklytimesnow.com.au


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