Miller Magazine Issue: 121 January 2020

86 MARKET ANALYSIS MILLER / JANUARY 2020 The start of the year wasn’t easy for sure. A lot of dra- matic passage happened, both natural disasters and the Middle East operational load electrified the spectators. Firstly, the main acts of nature came fatal down. Australi- an Bank Westpac estimates direct losses from Australian bushfires at $ 3.5 billion. "As of January 10, 10.55 thou- sand claims were filed with Australian insurance compa- nies with a total insured value of about $ 645.6 million," the statement said. As the bank’s experts indicate in their forecast, uninsured losses requiring state compensation “are about twice the size of the insured.” Thus, taking into account the already allocated $1.4 billion by the au- thorities, "the total cost of the disaster today is likely to be about $3.54 billion." According to Westpac experts, the fires affecting some of the most densely populated areas of the continent had a very negative effect on agriculture. Farmers were forced to slaughter thousands of cattle, the destruction of power plants affected dairy production, and a number of vineyards were in the zone of active fires and were destroyed. Australia is the seventh-largest dairy exporter in the world, supplying mainly to Asian markets such as fresh milk, butter, and cheese, as well as milk powder. According to government data, the dairy industry is the fourth largest agricultural industry in the country, with a value of $2.3 billion. According to the country's chief commodity market forecaster, it was previously expected that milk produc- tion in Australia could fall to a 22-year low due to the drought, and this led to the struggles of processors for sufficient supplies to meet demand. "Processors have already anticipated problems as milk production in Aus- tralia is declining," said Michael Harvey, a Rabobank dairy market analyst. Many farmers are now trying to feed their livestock and this can affect both milk production and herd reproduc- tion. Wildfires in Australia have damaged 6 million hec- tares in Queensland, New South Wales, Victoria, South Australia, Tasmania and Western Australia can have a significant impact on the country's grain and compound feed markets, Rabobank analysts said.