MD_DA120 Oceania Dairy Market Overview Report 29 - Released on July 21, 2022 NEW ZEALAND In recent weeks, the GDT has seen the price for most dairy commodities continue the trend lower, with further price volatility expected over the coming months. Even so, sources suggest that several key New Zealand dairy commodities prices are somewhat elevated, in respect to the dairy commodity prices of other global market representatives. Reports indicate, among factors contributing to the country's current inflation rate, are higher milk and cheese prices. Meanwhile, higher milk prices across most of New Zealand have not encouraged milk production output. As milk producers work through the seasonal production slowdown, sources point out that most are unwilling to produce milk in excess, as they cope with current market dynamics, where surging farm input costs that include fuel, fertilizer, feed, and labor, impact farmers' outlooks for new year profitability. New Zealand's milk collections for May 2022, the last month of the current production year, posted a 6.6 percent decline, ending the 2021/2022 cycle with a 4.1 percent year-over-year reduction in milk collections. In looking ahead, even with the winter season being in its beginning stages, dairy industry representatives are cautiously considering milk volumes the New Zealand spring flush could potentially produce. AUSTRALIA In Australia, record milk prices are being paid across all states with the beginning of the new production season. Thanks to dynamic competition at the milk processor level along with the ongoing strength in dairy prices and a weaker Australian dollar, in Victoria, the largest milk supply region for a major cheese producer, the milk pay price is forecasted to grow between 20 -30 percent in 2023. With the upswing in pay prices, increases in dairy product prices are being realized in the retail and food service sectors, where consumers are seeing up to a 20 percent surge in the milk price. While there is some consumer resilience to higher prices, inflationary pressures have triggered lower demand. Meanwhile, cheese and whey were notable contributors to the increase in the May export commodities market compared to a month ago, 28 and 43 percent, respectively, as Asia accounted for much of the drop in Australian exports to China. Total dairy exports in May increased 4 percent year-over-year. Information for the period July 11 - 22, 2022, issued biweekly Secondary Sourced Information: AUSTRALIA MILK PRODUCTION According to Dairy Australia, July 2021 - May 2022 seasonal milk production in Australia, 7942.1 million liters, decreased 3.5 percent from July 2020 - May 2021. More detailed production data are in the table which follows. AUSTRALIA MILK PRODUCTION, MILKFAT and PROTEIN July 2021 - May 2022 Million Percent Change Percentage State Liters From 1 Year Ago Milkfat-Protein New South Wales 994.7 + 0.6 4.23 3.42 Victoria 5,050.5 - 3.7 4.49 3.51 Queensland 277.1 - 2.7 4.26 3.39 South Australia 457.3 - 1.1 4.21 3.46 Western Australia 312.1 - 6.1 4.21 3.30 Tasmania 850.5 - 7.5 4.91 3.89 Australia (Total) 7,942.1 - 3.5 4.46 3.52 AUSTRALIA EXPORTS July 2021- May 2022 milk exports from Australia, 248.727 MT, increased 53.2 percent from July 2020-May 2021, according to Dairy Australia. NEW ZEALAND EXPORTS January - May 2022 bulk and packaged milk exports from New Zealand 111,000 MT, decreased 5 percent from January - May 2021, according to CLAL data made available to USDA. The main export destinations January - May 2022, quantities, and percent change from January - May 2021, were China, 81,493MT, -10.85 percent; Philippines, 8,473 MT, +49.79 percent; and Taiwan, 7,040 MT, +16.08 percent. Published by: Dairy Market News - Madison, WI DANIEL JOHNSON, 608-422-8605 Email: daniel.johnson4@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