MD_DA120 Oceania Dairy Market Overview Report 21 - Released on May 27, 2021 AUSTRALIA: Australian fluid milk exports continue to expand. July 2020 – March 2021 milk exports from Australia 209,940 MT, increased 17.8 percent from July 2019 – March 2020, according to Dairy Australia. A large Australian and New Zealand dairy cooperative recently affirmed the coop’s intention to remain committed to operations in Australia. An executive affirmed that the current Australian milk price is sustainable, as it is supported by earnings and is not coming from the balance sheet. This follows a decision to close an aging dairy plant in Dennington which led to some speculation that financial viability was suffering or that coop assets were going to be sold. The coop official said that plant has an aging open top drier, which presented problems with foreign matter and hygiene. The representative said the decision to close was related to moving toward focusing production in more efficient plants. Additionally, the decision to resume control of a Gippsland dairy plant at Darnum from a Chinese based joint venturer was attributed to affirming the production focus preferred by the Australian owners, which the official said was not always in harmony with goals of the Chinese based joint venturer. Mice have overrun New South Wales. The situation is called a plague. This impacts dairy producers because hay in many sheds has become massive mouse hotels, in which the mice are eating and contaminating grain and other feed. Aside from that, it is unsettling to the cows to have plague levels of chirping, squirming mice all about. The situation stems from abundant rain, which created bumper crops. Reports say this led to ideal conditions for mice breeding. Various eradication measures are under consideration. The primary disagreement now is whether to use various poisons. NEW ZEALAND: April 2021 New Zealand milksolids and tonnage reported by DCANZ and NZX are up 11.6 percent from April 2020 milksolids. Season to date milk solids and tonnage through April 2021 increased 2.4 percent from last season through April 2020. Sources in New Zealand cite the high production increases as making the higher recent volumes of WMP and butter offered at GDT events possible. January – March 2021 bulk and packaged milk exports from New Zealand 73,000 MT, increased 27.4 percent from January – March 2020, according to CLAL data made available to USDA. The main export destinations January - March 2021, quantities, and percent change from January – March 2020, were China, 58,588 MT, +48.05 percent; Taiwan, 3,567 MT, -14.01 percent; and Philippines, 3,317 MT, -35.55 percent. With the new dairy season beginning June 1, 2021, focus on new season milk price expectations is active. NZX affirmed its forecast of 8.36 New Zealand dollars/kg milk solids following the May 18, 2021 GDT event. However, there are factors that may dampen the magnitude of milk production increases which might be expected to be generated by a higher milk price. Higher feed prices are one such factor. Another is tighter capital availability. Also, possible regulatory changes related to carbon sequestration may put pressure on productivity. Waikato also remains unusually dry after two seasons with low rainfall. Good rain is needed to refill groundwater, which would help pasture growth. Continuing impacts of dairy product shipping delays have now manifested in lower FY forecast earnings by a New Zealand dairy. FY 2021 guidance was just downgraded. A factor cited was ongoing shipping delays which will result in the sale of some ingredient products after the FY 2021 balance date. Also cited was adoption of a more conservative approach to year-end inventory volumes and valuation. A large New Zealand dairy cooperative is closing an eastern Victoria dairy processing facility at Darnum for five weeks for planned multi-million New Zealand dollar maintenance. Milk that would have been processed in the facility will go to Stanhope to be used for cheese-based products. Information for the period May 17 - 28, 2021, issued biweekly Published by: Dairy Market News - Madison, WI Eric Graf, 608.422.8590 Email: Eric.Graf@usda.gov Additional Dairy Market News Information: Dairy Market News (DMN) by Phone: (608)422-8602 DMN Website: https://www.ams.usda.gov/market-news/dairy DMN MARS (My Market News): https://mymarketnews.ams.usda.gov