Australia: Dairy and Products Semi-annual
Post forecasts milk production at 9.1 million MT in 2017. This represents a decrease of 2.7 percent on actual milk production of 9.35 million MT in 2016. This Post revision reflects significant disruption to production, lower farm gate prices, an expected decline in yields and a smaller Australian dairy herd. Lower fluid milk supplies to processors are expected to constrain production and exports of butter, cheese and both whole and skim milk powder. Higher international prices for dairy products should eventually lead to a recovery in milk output, as inputs costs such as water and feed grains are relatively low. But in the short term, dairy farmers appear unlikely to pursue herd rebuilding as farm incomes have declined sharply, culling is above average and confidence is low.
