Wednesday, 29 September 2021 12:55

Aussie farmers faring well despite Covid headwinds

Written by  Staff Reporters
Australian milk production could rise at least 2% this year, according to the latest forecast. Australian milk production could rise at least 2% this year, according to the latest forecast.

Australia's dairy industry is on track for a slight increase in milk production this season.

According to Dairy Australia's latest Situation and Outlook Report, conditions on farm remain relatively favourable.

Australia's current production forecast suggests rise of up to 2%, which would equate to a national milk pool of 8.8 to 9 billion litres.

Dairy Australia senior industry analyst Sofia Omstedt says strong farmgate milk prices have subdued input costs have allowed most farmers to focus their attention on calving and the spring flush.

A wet start to the season slowed milk flows in July, however, drier weather has since helped to improve milk production conditions heading into spring.

After a spike in sales last year, sparked by panic buying as lockdowns took place across the country, shoppers have reverted to pre-Covid trends, with sales of fresh and long-life milk tracking well in line with 2019.

"The vast majority of Australian households regularly purchase milk at 98% and only 2% of buyers exclusively turn to dairy alternatives, so dairy demand continues to be strong," says Omstedt.

"Plant-based beverages remain complementary to, rather than a substitute for, milk."

Meanwhile, global dairy demand has been put to the test as the Covid-19 delta variant spreads across the world.

While a mid-year market lull is common, this year's was exacerbated by new lockdown implemented in key regions, for example in parts of southeast Asia and some provinces in China.

Omsedt says this saw commodity values for most dairy products and trend downwards, however, this price slide now seems to be stabilising.

As dairy demand moves back into growth phase, freight challenges are becoming increasingly prominent as shipping congestion worsens. With new lockdowns and temporary terminal closures, this is projected to remain a challenge for anyone exporting (or importing) products for the foreseeable future.

Omstedt notes that with global supply expected to continue its current growth trajectory, solid ongoing demand will be of paramount importance.

"To date, underlying global demand has proved sufficiently strong and adaptable.

"Nevertheless, rising Covid-19 cases demonstrate that even agile supply chains and strong fundamentals cannot completely offset the impact from consumers facing a new period of prolonged restrictions.

"While Australia's dairy farmers look set to benefit from a wet spring and ongoing profitability this season, the industry more broadly will be keeping an eye out for more curveballs as the pandemic continues to unfold."

More like this

Locally grown fruits, veg in full supply

One of the country’s two largest supermarket chains is reporting that for the first time since the disruption of Covid, they have largely full supply on almost all fruit and vegetables grown locally.

Global shipping rates soar again

Covid-19 took global shipping rates to mind boggling highs, but over the subsequent 12-15 months they returned to more sustainable levels. Fast forward to July 2024 and rates have nearly doubled over three months.

HortNZ helps growers rebuild, recover

Horticulture New Zealand (HortNZ) chief executive Nadine Tunley says the industry-good body’s support for growers has proven to be multifaceted.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

OSPRI's costly software upgrade

Animal disease management agency OSPRI has announced sweeping governance changes as it seeks to recover from the expensive failure of…

Machinery & Products

BA Pumps expand

Cambridge based BA Pumps & Sprayers, specialists in New Zealand-made spraying equipment, has acquired Tokoroa Engineering’s product range, including the…

Entries open for innovation award

Fieldays and its renowned Innovation Awards are celebrating their 57th year, marking a longstanding tradition in the agricultural calendar, with…

» Latest Print Issues Online

Milking It

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Not fair

OPINION: The Listener's latest piece on winter grazing among Southland dairy farmers leaves much to be desired.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter