Oceania Dairy Market Overview

MADISON - Aug 19/10 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production increases are starting to
be reported out of New Zealand.  Milk handlers are stating
that the increases are not huge, but noticeable.  In
Australia, the beginning of the new milk production season is
still a number of weeks away.  Late winter weather conditions
and temperatures continue to prevail.  Grass growth remains
dormant.  Final milk production figures out of Australia were
recently released for the 2009 - 2010 milk production year
(July - June).  As has been the case for much of the second
half of the production year, end of season milk output has
been stronger than previous year comparables.  For June, milk
output was 4.6% heavier than June 2009, thus the cumulative
output for the year was down 3.9% from the 2008 - 2009 year.
Although the cumulative total still lagged the previous
season, milk producers and handlers were pleased to see that
the decline was much smaller than early season predictions.
The 2009 - 2010 season ended on a positive note.  Australian
farmers are optimistic about the upcoming milk production
season as conditions are very good for a strong start to the
season.  Farmers and milk handlers are stating that the
milking herd ended the previous season on a positive note and
wintered well, thus a positive start is also expected due to
these factors.  Typical winter weather patterns, not seen in
many years in Australia, provided much needed moisture to
replenish depleted water levels and reserves.  With many
positive factors pointing to a good milk production season in
Australia, milk handlers are questioning how farmers will
handle the financial end.  Many feel that farmers will be
conservative and pay down debt incurred in recent years versus
expanding their operations.  Following the August 3
global/Dairy Trading event, Oceania handlers and traders
adjusted their prices somewhat, but often not to the average
level of the various products traded.  Traders and handlers
continue to state that this is an auction which provides a
market sentiment at that time, but is not setting ongoing
price levels.  Traders and handlers are speculating that
recent price weakness at the trading event will stabilize and
will probably start to increase in the near future.  In
September, trading will go to twice a month with the next
event on September 7.  As milk production seasonally
increases, manufacturers and handlers are deciding which
direction to go with early milk volumes.  Many traders and
handlers state that good whole milk powder volumes are already
in the sales books, thus initial milk volumes will probably be
cleared in this direction.  New buyer interest remains slow in
developing as buyers are cautious with their purchases.


0930c

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STAT News Service