Quarterly Australian Milk Production Update – Oct ’16
Executive Summary
Australian milk production figures provided by Dairy Australia were recently updated with values spanning through the first quarter of the ’16-’17 production season. Highlights from the updated report include:
• Australian milk production remained lower on a YOY basis for the 12th consecutive month during Sep ’16, finishing down 10.2%. Australian milk production declined by 2.2% throughout the ’15-’16 production season and is down an additional 9.9% throughout the first quarter of the ’16-’17 production season.
• Recently experienced adverse conditions are expected to contribute to the Australian dairy cow herd declining for the first time in six years during 2016. USDA projects the Australian dairy cow herd to contract by 0.9% throughout the year.
• 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.
Additional Report Details
According to Dairy Australia, Sep ’16 Australian milk production declined by 10.2% YOY, finishing at a nine year low for the month of September. Australian milk production has declined on a YOY basis for 12 consecutive months through September. Overall, Australian milk production finished the ’15-’16 production season down 2.2% as production levels fell 4.9% throughout the second half of the season. Production is down an additional 9.9% throughout the first quarter of the ’16-’17 production season.
Low farmgate milk prices and poor weather have taken a toll on Australian dairy producers over recent month, contributing to the declines in production volumes. These recently experienced adverse conditions are expected to contribute to the Australian dairy cow herd contracting by 0.9% throughout 2016, to 1.69 million head. The YOY decline in the Australian dairy cow herd would be the first experienced in the past six years.
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.
Low farmgate milk prices and poor weather have taken a toll on Australian dairy producers over recent month, contributing to the declines in production volumes. These recently experienced adverse conditions are expected to contribute to the Australian dairy cow herd contracting by 0.9% throughout 2016, to 1.69 million head. The YOY decline in the Australian dairy cow herd would be the first experienced in the past six years.
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.