Australian milk supply could drop 7%
AUSTRALIA IS PREDICTING a drop in milk supply by as much as 7% this season in a “worst case scenario”. If that eventuated, it would bring the national milk pool to a two-decade low of 8.6 billion litres and lead to extensive pressure across local supply chains, Rabobank’s latest Agribusiness Monthly said.
That was in stark contrast to production conditions in New Zealand, where milk collections continued to pour in, leading to national supply climbing almost 6% for the first four months of the 2018-19 seasons to September 2018. With weather conditions and pasture growth largely favourable in October, milk collections across the peak supply month were expected to remain elevated compared to the previous year. International guidance suggested a 88% chance of El Nino conditions developing for the tropical Pacific over the coming months to January.
International modeling also suggested El Nino conditions might continue through to autumn 2019, while NIWA noted some long-range models suggested such conditions might linger through to winter next year. Oceania commodity prices were mixed in October; the general theme of plentiful production in New Zealand continued to underpin pricing pressure on whole milk powder, while butter and skim milk powder prices moved fractionally upwards.
RaboResearch expected further upside in commodity prices to occur through 2019, helped by steady demand and tighter global milk supplies.