Upswing in Australia’s milk production seen continuing into 2021 – USDA

Milk production in Australia this year had seen a dramatic turnaround as a result of drought-breaking rains and an excellent pasture and crop growing season in eastern Australia, the US Department of Agriculture (USDA) said, adding that output in 2021 was forecast be hiher.

It said in a report that milk production next year was expected to be 9.4 million metric tons (MMT), over a two percent increase over the 2020 estimate of 9.2 MMT and a four percent increase over the 2019 drought-impacted result of 8.83 MMT.

“Increased fodder production in the spring of 2020 (September to November) will replenish reserves leading into 2021. With a bumper grain crop and lower grain prices, coupled with improved water availability and lower irrigation prices, the scene is set for 2021 milk production to recover to near pre-drought levels,” the USDA report said.

Fresh milk consumption in 2021 is forecast to remain stable at 2.55 MMT, accounting for 27 percent of overall milk production. Factory use consumption, however, is forecast to rise to nearly 6.6 MMT, from 6.4 MMT in 2020. Of this amount, 58 percent is set to be used for cheese production in 2021, with cheese production forecast to expand 10,000 metric ton (MT) over the 2020 estimate, according to the report.

“Despite the COVID-19 pandemic resulting in lockdowns and restrictions to varying extents in the states and territories in Australia, the impact on the overall consumption of milk and dairy products has essentially been relatively minor,” it said.

The pandemic has resulted in a significant shift in reduced
consumption in the food service sector but compensated by increased retail sales, the report said, adding that with increased milk production the manufacturing industry is expected to continue to prioritise cheese production over other manufactured products, which is a continuing trend which has been evident over the last five years.

As a result, cheese is anticipated to see the largest rise in production, with practically all of this increase being exported. Butter and whole milk powder (WMP) production are also both expected to rise slightly, while skim milk powder (SMP) production is forecast to remain steady, it added.

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