Australian milk production continues to fall, with the latest figures from Dairy Australia showing that for November production was down 6.3% compared to the same month last year.

These latest figures bring year-to-date production, which is from July in the case of Australia, is down 9.4% overall.

In November, some 934m litres of milk was produced in Australia, bringing the total volumes to date to 4,125.7m litres.

Australian milk production fell sharply last year, with overall production for the 2015/2016 season down 2% to 9,539 billion litres.

National Australia Bank has said that the ongoing impact of lower farmgate prices is clearly a major factor in lower Australian production.

While the rally in international markets should see some further upside at farmgate, the bank said that it is unclear whether production will respond as the seasonal peak is now over.

If milk deliveries continue the pace set last year, it expects 2016- 17 seasonal production to be down 8.2% to 8.7 billion litres.

Even if production recovers this year, seasonal production will likely still be down around 5%, according to the bank.

However, the bank has some doubts about the ability for production to recover quickly, given recent herd thinning driven by low farmgate milk prices combined with good cull cow prices.

Global Dairy Trade

Meanwhile, at this week’s Global Dairy Trade auction, there was a slight rise of 0.6% in overall prices.

Whole milk powder (WMP) prices were down by 0.1% at the auction, with lactose and rennet casein prices posting a mixed performance.

Skimmed milk powder (SMP) prices were also down by 1.6%, but butter prices actually improved by 1.6% on the previous auction results.

This positive auction result follows on from the first auction of the year, which was held two weeks ago, where prices declined by 3.9%.