Executive Summary

Australian milk production figures provided by Dairy Australia were recently updated with values spanning through the end of the first quarter of the ’21-’22 production season. Highlights from the updated report include:

• Australian milk production remained lower on a YOY basis for the fourth consecutive month throughout Sep ’21, finishing down 2.9%. ’20-’21 annual production volumes increased 0.9% from the previous year, rebounding to a three year high level, however ’21-’22 YTD production volumes have declined 3.3% on a YOY basis throughout the first quarter of the production season.
• The Australian dairy cow herd is projected to decline 0.7% throughout the 2021 calendar year, reaching a record low level, as some dairy producers continue to exit the industry and high beef prices have encouraged others to shift to beef production.
• Australia is the fourth largest global dairy exporter, accounting for 4.9% of combined butter, cheese, nonfat dry milk and whole milk powder exports throughout 2020. The bulk of Australian dairy exports are in the form of cheese and nonfat dry milk.

Additional Report Details

According to Dairy Australia, Australian milk production volumes remained lower on a YOY basis for the fourth consecutive month throughout Sep ’21, finishing down 2.9%. According to the USDA, cool, rainy weather restrained Australian milk production volumes throughout the early months of the ’21-’22 production season.

’20-’21 annual Australian milk production volumes finished 0.9% above the 24 year low level experienced throughout the previous production season, reaching a three year high level. According to the USDA, improved fodder and grain availability, coupled with strong milk prices, helped strengthen milk production volumes throughout the most recent production season.

’21-’22 YTD production volumes have declined by 3.3% on a YOY basis throughout the first quarter of the production season, and are on pace to reach a 25 year low level. Milk production volumes are expected to rebound throughout the production-heavy second quarter of the current production season as recently experienced excess moisture is expected to aid in pasture and forage growth. Less supplemental feeding is expected, particularly with strong forage carry over from last year.

Low pasture volumes and supplementary feed on hand contributed to the Australian dairy cow herd contracting by 5.6% throughout 2019. Australian dairy herd figures declined by an additional 1.4% throughout 2020, despite improvements in pasture conditions, due to biological lags in herd rebuilding. The USDA is projecting the Australian dairy cow herd will decline by an additional 0.7% throughout 2021, reaching the lowest figure on record, as some dairy producers continue to exit the industry and high beef prices have encouraged others to shift to beef production.

Australia is the fourth largest global dairy exporter, trailing only New Zealand, the EU-27+UK and the U.S. Of the top five dairy exporting regions accounting for over 90% of total global dairy exports, Australia accounts for 3.0% of total combined milk production and 4.9% of combined butter, cheese, nonfat dry milk (NFDM) and whole milk powder (WMP) export volumes throughout 2020.

The bulk of Australian dairy exports are in the form of cheese and NFDM. Australia was the fourth largest exporter of both cheese and NFDM throughout 2020, accounting for 7.2% of global cheese export volumes and 5.3% of global NFDM export volumes.