Bumper season but only small production increase: Dairy Australia

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Despite a good season for dairy farmers, milk production growth has been minimal, Dairy Australia reports

One aglobal scale, demand for dairy exports has remained consistent despite the pandemic

Dairy farmers across the country are relishing one of the best seasons in recent memory, according to Dairy Australia’s Situation and Outlook report, however despite the improved conditions, milk production has only increased minutely.

As has been the case with many other agricultural sectors across the country, favourable conditions across Australia’s agricultural regions have improved on a whole, in large due to the La Niña weather pattern, which has produced a cooler, wetter summer.

However, despite the favourable outlook for the dairy sector, Dairy Australia’s revised milk production forecast has improved only slightly, with the new +1 per cent outlook updated from the previous -1 per cent figure.

Such a minor shift in Dairy Australia’s position, in lieu of the bumper season, follows a number of implicating factors such as a smaller national herd, labour shortages and continued farms exists.

The issues, which have caused significant disruption across the sector, represent long-term challenges for the industry and are not unique for any single year and will likely require consecutive years of good conditions to recover and materialise into more fervent milk production.

Domestically, the market for dairy products remains high and has improved following the relaxing of COVID restrictions in food outlets such as restaurants and cafes.

Cheese sales have improved 10.3 per cent in volume over the past year and 17.5 per cent in value, while yellow spread (eight per cent) and milk (4.3 per cent) have also recovered slightly.

On a global scale, demand for dairy exports has remained consistent despite the pandemic, with government stimulus and recovery in key markets such as China helping avert any detrimental crisis for the sector.

The global dairy trade improved 2.8 per cent in the year up until October, while milk production is also slightly elevated, experiencing a 1.1 per cent growth up until December.

Dairy sectors in countries that have suppressed the effects of COVID-19 infection rates are returning, gradually, to more accustomed trading conditions despite systematic lockdowns, while markets where the pandemic is extensive are pinning their hopes on vaccine rollouts to ease conditions.

Major markets around the world finished 2020 steadily in terms of milk production, including Europe (excluding the United Kingdom) at +1.7 per cent and the United States, which rebounded early after a frenzied response to the pandemic, finishing +1.9 per cent.

Closer to home, New Zealand regressed and finished 2020 down 0.1 per cent (from July through to December), however this is largely attributed to below average rain and deficiencies in the soil moisture.

In all, the global dairy economy is set to grow 5.5 per cent in 2021 according to the International Monetary Fund (IMF) and will likely fluctuate depending on the efficiency and effectiveness of COVID vaccines as well as the implications, including variant strains of the virus and possible future infection waves.




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