Milk production in New Zealand and Australia remains strong in April

Milk production in New Zealand and Australia showed strong year-over-year growth in April, supported by improved milk solids output and firmer dairy prices. New Zealand continues to outperform historical production levels as the season nears its end, while Australia recorded a modest recovery driven by higher collections in key regions. However, increasing El Niño risks and below-average rainfall forecasts could pose challenges for pasture conditions and milk production in the coming months.New Zealand observed milk production of 1.54 million tons in April, reflecting an increase of 6.04% compared to the previous month as the dairy season approaches its closure. This also reflects a slight deceleration from the 9.76% growth observed in March, but production remains significantly above the levels recorded during the previous five years for the same month.At the same time, milk solids (MS) output totaled 160,548 tons, 6.9% above the previous year. MS growth outpaced that of liquid milk production, implying an improvement in the overall fat and protein content of the milk.All in all, New Zealand is reaching the end of the season on a strong footing, although milk production is now rapidly declining on a seasonal basis. As of April, cumulative liquid milk production increased by 5.6% year-over-year to 7.89 million tons, while MS output increased by 6.4% to 752,668 tons.With the country moving into colder weather, current climatic conditions remain neutral. However, the probability of an El Niño event occurring increased to 65% between May and July, raising the risk of drought spells and increasing the need for feed management and pasture protection. Although any impact would initially affect the months of lowest milk production in New Zealand, the effects could become more apparent in the medium term.Meanwhile, dairy prices have provided some support for production in the country, with most dairy commodities reporting price gains in the Global Dairy Trade as April transitioned into May. Categories that observed recoveries during this period included SMP, WMP, Mozzarella, and Butter. This recovery could provide temporary support to farmgate milk prices, although the overall trend still points to a subdued pricing environment until Q3, according to Rabobank.AustraliaWhile more modest, milk production in Australia recorded growth of 4.1% compared to the previous year, reaching 618.3 million liters. Most of this growth derived from increased collections in Victoria (+5.1%) and New South Wales (+4.9%), despite contractions in South Australia (-4%).Meanwhile, the nutrient content of milk increased by 1.9% over the previous year, reaching 4.6% fat and 3.61% protein. As a result, overall MS output increased by 6.1%, significantly outpacing the growth in liquid milk production.Positive developments in recent months resulted in cumulative production increasing by 2.2% year-over-year to 2.53 billion liters as of April. From a 2025/26 perspective, however, weaker performance earlier in the season has still resulted in a 0.3% decline compared to the previous season.Despite this recovery in the Australian dairy sector during the first four months of the year, further challenges for milk production are expected. The risk of El Niño-related impacts appears to be more severe in Australia than in New Zealand, with April already recording below-average rainfall in southwestern Australia. Although the rainfall outlook between May and July remains uncertain, the probability of rainfall exceeding the median is particularly low in the western regions of the country, potentially limiting forage availability. Considering the supply challenges faced by the Australian dairy industry since the previous year, processors are announcing support payments to farmers to sustain production. According to Rabobank, processors implementing these measures include Lactalis, Bega Group, and Bulla. Moreover, higher milk prices are increasingly being felt by consumers, driven by rising costs associated with global supply chain disruptions.