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Insights April 2021

13 April 2021 |Dairy
Dairy cow image

Insights April 2021

13 April 2021 |Dairy
The April update provides an analysis of production and pricing trends for Australian dairy producers. It provides producers with a timely overview of current trends and an outlook for the coming months.

Commodity Overview

  • Drier conditions in April are unlikely to impact milk supply as feed stocks remain high.
  • Chinese demand for milk powder has subsided after a strong buying period in 2021.

    National year to date milk production is currently sitting 0.9 per cent higher compared to 2019/20 (as of March 1st). Tasmania leads the way at a state level reporting a 2.3 per cent increase in year-to-date milk production. Autumn conditions have so far been perfect for southern dairy farmers. Widespread rainfall in March led to pasture growth making the most of warm soil temperatures and sunny days. April is expected to be drier across New South Wales with a 35 per cent chance of exceeding median rainfall across the state, compared to a 50 per cent chance of exceeding median rainfall in Victoria, South Australia and Tasmania. Milk supply is unlikely to be impacted for the most part, as feed stocks remain high.
    Global dairy prices edged higher in March before flattening in the first auction of April, demand from China eased in combination with an increase in supply of finished product. Cheddar prices increased by 3.2 per cent while skim milk powder prices eased 0.4 per cent. Cheddar prices are hovering at similar levels 12 months ago but may come under pressure from increasing supply in April. Skim milk powder prices 33.9 per cent higher than this time last year, benefitting from stockpiling activities over the past four months. As demand from China eases prices are likely to come under pressure in April.
    Overall, the global market for dairy products has remained resilient at a point in the year which traditionally correlates to increasing supply as Northern and Southern hemisphere production crosses over.

 

Source: Global Dairy Trade

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