A COVID-19 related dairy crisis has yet to hit as hard as feared, dairy experts from 70 countries decided during the 21st International Farm Comparison Network Dairy Conference.
Private consulting business Xcheque managing director Jon Hauser attended the online event on June 2 and 3 as the Australian partner representative, and said prior to the conference, there had not been any support for predictions of a low price for 2020 to 2021.
“There is no doubt in my mind that south-east Australian dairy farmers have dodged a bullet because of the mandatory requirement for a minimum price on June 1 and the competitive milk supply environment,” Mr Hauser said.
The views of analysts for the world milk price in 2020 and future markets have not aligned, however, as of early June, dairy future markets expect a fast milk price recovery to reach a level of US$35/100 kg of milk in July.
IFCN data saw milk production growth at 1.4 per cent was significantly below the long-term average (2.3 per cent) in 2019 — driven mainly by India, Oceania, Africa and the Middle East.
Meanwhile, the rising popularity of milk alternatives in rich countries and lower milk availability in emerging economies slowed demand growth.
National milk price trends for 75 countries in May compared to February showed milk prices declined by 4.6 per cent on average.
The United States and India could be considered as the epicentre of the dairy crisis, with drops of 29 per cent and 19 per cent respectively.
Dairy farm economics looked more positive as the world milk price increased by more than six per cent to US$37.3/100 kg in 2019.
IFCN Dairy Research Centre managing director Torsten Hemme said for many farmers in the US and European Union, this milk price was still “too little to live on and too much to die”.
A poll among dairy experts revealed one third considered their country to be at the beginning of the crisis and two thirds thought the bottom of the crisis had already been reached.
The conference determined real time monitoring of dairy indicators was key, and IFCN will update its research in coming months to help people in the dairy industry to navigate these times.