Insights April 2022
Insights April 2022
- Bulla has announced an opening price of $7.40-8.00/kg MS for the upcoming 2022/23 season.
- The Global Dairy Trade Index declined In March for the first time since December 2021.
- National milk production has declined 6.1 per cent year-on-year for the season to February.
National milk production for the season to February was down 6.1 per cent year-on-year and 3.8 per cent lower on the five-year average. New South Wales was the only state which had its milk production increase year-on-year, growing two per cent. Conversely, Victorian production sits 7.8 per cent lower year-on-year. Pasture growth is predicted to be lower than forecast in Victorian dairy regions. Soil moisture levels sits below average across West Gippsland and well below in regions of south west Victoria. The impact of reduced pasture growth on Autumn milk production is yet to be seen.
The Global Dairy Trade Index (GDT) has declined for the first time since December 2021. The first GDT auction for April saw a decrease of 1.9 per cent to US$1,564 per tonne. Cheddar prices increased 1.2 per cent month-on-month to US$6,472 per tonne, whilst skim milk powder (SMP) prices increased 2.6 per cent to US$4,599 per tonne. The increase in March was more reserved than the rises seen in recent months. The AUD rose by 3USc to 76USc, providing another warning of inflationary pressures being felt across the economy. This negated the growth seen in global markets as cheddar and SMP prices decreased in Australian dollar terms.
Bulla is the first processor to announce opening prices for the 2022/23 season. They announced the first estimate of $7.40-8.00/kg MS well ahead of the 1st June deadline. Burra and Saputo have both announced a step up of 20c/kg MS to their 2021/22 milk prices which is being retrospectively applied across the whole season. This step up follows the 10c/kg MS step up announced by Burra in January. As a result, the southern Australia farm gate milk price now sits at $7.18/kg MS, an increase of 8c/kg MS from last month.
Sources: Global Dairy Trade, Dairy Australia