MD_DA120 Oceania Dairy Market Overview Report 9 - Released on February 28, 2019 AUSTRALIA: Seasonal milk production in Australia through December is 5.1 percent lower than last year. The states of South Australia and Tasmania are up, but the other four states, which account for the bulk of milk production, are lower. The following table displays Dairy Australia data July through December. AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN July-December 2018 December 2018 Million Percent Change Percentage Percentage State Liters From 1 Year Ago Milkfat Protein New South Wales 554.4 -9.6 3.88 3.13 Victoria 3,267.2 -6.1 4.11 3.29 Queensland 196.4 -10.0 3.95 3.21 South Australia 267.4 +2.8 3.83 3.16 Western Australia 198.9 -1.5 3.95 3.20 Tasmania 491.0 +4.3 4.23 3.37 Australia (Total) 4,975.4 -5.1 4.08* 3.27** * +1.2 percent from prior year period ** +0.0 percent from prior year period Data from Dairy Australia Dairy producers who depend more heavily on irrigation have been believed to have some of the higher percentage production declines. Water is less available following the extreme heat and low rainfall in many areas of Australia. That leaves less surface water and increases the need for irrigation water, if it is available, or if any given dairy producer can afford it. Many producers continue to shrink herd size to continue to cope under current circumstances. The current state of the Australian dairy industry is one of mostly steady milk prices but elevated costs. This results in less purchased feed, herd reductions, less milk produced, and dire financial stress for many producers. NEW ZEALAND: January 2019 New Zealand milk production reported by DCANZ was 2.5 million MT, up 8.7 percent from January 2018 milk production, 2.3 million MT. January 2019 milk solids, 209.0 million kg, are up 7.7 percent from January 2018, 194.1 million kg. Milk production increases reflect higher per cow output. One New Zealander notes they are doing more with fewer. It is a cow productivity matter. Dry mid-January into early February weather in parts of New Zealand has returned to more normal precipitation. There is some discussion about the potential that when February milk production data is official, weather may have led to February milk increases being moderated compared with recent months. Fortunately, the wonderful earlier season weather has left farms with good stocks of hay and feed to mitigate the recent weather blip. Most New Zealand dairy producers are feeling good levels of financial confidence about the current season. Pay pries for most producers so far are ahead of break-even levels. This is helping profitability and decreasing financial related stress. Longer term apprehensions and uncertainties are characterized as looming over the dairy industry in New Zealand. Water challenges and heightened concerns with cows as a source of greenhouse gasses are ascending on the public political agenda. The tourism industry in New Zealand is robust. That sector, coupled with concern by New Zealanders over water quality, are bumping against agricultural water demands. New Zealand is actively seeking ways to reduce greenhouse gases. It is expected that these factors may soon begin to bear more substantially on milk production in New Zealand. Information for the period February 18 - March 1, 2019, issued biweekly Published by: Dairy Market News - Madison, WI Eric Graf, 608.422.8590 Email: eric.graf@ams.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 (MyMarketNews): https://mymarketnews.ams.usda.gov/ DMN Database Portal: https://www.marketnews.usda.gov/mnp/da-home