January 7, 2020


Bushfires hit Australia's major dairy regions


Australia's east coast bushfires have swept through the country's important dairy regions, adding to the poor supply caused by the prolonged drought, reported Reuters.


According to Dairy Australia data, the bushfires affecting major dairy locations in the New South Wales south coast and East Gippsland in Victoria make up a third of Australia's milk output.


Phin Ziebell, National Australia Bank agribusiness analyst said they are waiting for full assessment on the effects of the bushfire but estimates hundreds if not thousands of cattle have died.


Australia supplies mostly the Asian market with fresh milk, butter, cheese and milk powder, and is the seventh biggest dairy exporter in the world. The country's dairy industry is worth 3.3 billion AUD (~US$2.3 billion; 1 AUD = US$0.69) and is Australia's fourth largest rural industry.


Australia's chief commodity forecaster had already predicted before the bushfires that dairy production will drop to its lowest in 22 years because of the drought.


Michael Harvey, Rabobank dairy analyst said dairy processors were already under pressure because of the drought. Farmers are finding it difficult to source for cattle feed, possibly affecting breeding and dairy production.


Australian Prime Minister Scott Morrison said close to 4,000 livestock have been killed by the bushfires.


The largest Australian-owned processor Bega Cheese Ltd said the bushfires have not affected its production facilities directly but it has affected its suppliers.


Paul van Heerwaarden, Bega Cheese chief executive said the company will be working with its employees, dairy farm suppliers and freight providers to make sure there is enough supply of milk to be delivered and processed. The company's shares fell 10% on January 6, 2020.


The Australian bushfires have swept through 15 million acres of land for weeks, killing 24 people and thousands of livestock.


-      Reuters