Dairy industry in Australia affected by drought and fire - global impact According to the latest estimates, the Australian milk production due to the drought and the fire will drop again in 2020 by 3 to 5% to 8.3 million tons. Just 5 years ago, production was approx. 10 million tons. However, there are considerable differences in the individual production areas. In the southern parts of the province of Victoria, there are even favorable production conditions due to the rainfall. In contrast, the regions to the northwest of New South Wales are significantly disadvantaged. Whole herds of cattle, especially young animals, fell victim to the flames. The feed stocks are scarce and expensive. Roads are partially closed so that the milk that is not collected is destroyed. Reconstruction will take years. The decline in production is primarily reflected in the reduced export products. Australia's dairy industry is largely geared towards exports and ranks fifth in world trade. The market share is particularly significant for cheese and MMP exports.A significant proportion of exports go to China and other Asian importing countries. A reduction in Australia's supply can therefore have an impact on global market and price developments. This is all the more true since the other exporting countries only signal limited increases in production. China has a need to replace fancy pork protein. The globally recognized results of the 1st auction of the Global Dairy Trade (GDT) in Jan 2020 showed consistently positive price increases for the milk products sold for the months of Jan to Jun 2020. The auction results in December 2019, however, were still clearly negative.
