May 13, 2005

Milk production season winds down in Australia and New Zealand

The seasonal milk production in Australia and New Zealand Oceania is nearing an end for the 2004-05 year. 

The milk production year for New Zealand will come to an end at the end of this month. Milk producers and handlers are estimating yearly output to trail last year by 3 to 4 percent. 

Although producers and handlers were hoping that the second half of the production season would generate some additional milk to help reduce first half deficits, the conditions did not develop as positively as they had hoped. Still, some felt that some recovery did occur. 

In Australia, the 2004-05 milk production season will continue through the end of June.  The most recent production data out of Australia for the 9-month period of July to April shows that output is still trailing last season by 0.3 percent. 

Cumulatively for the year thus far, output in Australia has fluctuated between even to 1.1 percent behind last year. Producers and handlers are hopeful that the final 3 months of the year will maintain these trends and that they will finish the year within an even to 1 percent behind last season range.

Milk production in Victoria for the period July-April is running 2.0 percent ahead of last year, while off in Queensland by 9.9 percent and 5.3 percent lower in New South Wales. 

As the milk production season winds down, so are manufacturing schedules.  In New Zealand, most plants are already closed for the season.  During the down time, plant maintenance will be performed so that plants will be ready to receive milk in the new season starting in August. 

In Australia, conditions are much the same as plants adjust their production schedules to declining incoming milk volumes.  Stocks of manufactured dairy products are in very close balance and remain often short of full needs.  Some handlers and traders indicate that they may have to look to outside sources to fully acknowledge all commitments during the upcoming winter months.  Most state that they will not have any surplus stock available for spot or additional buyer interest.  Early in the week in New Zealand, an unsettling situation developed which could potentially devastate the country's agriculture dependent economy. 

An extortionist claim to Prime Minister Helen Clark indicated that they have infected a New Zealand island with foot and mouth disease and that they also threatened to release the virus on the mainland later this week.  In light of this potential situation, European Union and Japan have already asked that livestock from the island be blocked from their markets.