Oceania Dairy Market Overview

MADISON - Sep 2/10 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production increases are becoming more
noticeable on the north island of New Zealand with the South
Island and Australia still holding at seasonally low levels.
Typically, the South Island of New Zealand lags the North
Island by 2 - 3 weeks with Australian output about 3 - 4 weeks
behind northern New Zealand.  Winter weather conditions have
been favorable for much of the Oceania region.  On the North
Island of New Zealand, wet conditions are being reported which
may be slowing seasonal increases, but for the most part, milk
volumes are on target with projections.  Australian producers
and milk handlers are reporting that the current winter season
is the first "typical" season in many years.  Good winter
moisture and favorable temperatures are contributing factors.
Milk producers are very optimistic about the upcoming milk
production season.  Although the 2009 - 2010 milk production
season came to an abrupt end in New Zealand, decent cow
conditioning, favorable winter conditions, and firm pay prices
are all positive factors for a good start to the new season.
Australian producers are likewise positive.  Similar positive
factors as their New Zealand counterparts along with a strong
finish to the 2009 - 2010 season are contributing to positive
outlook for the 2010 - 2011 season in Australia.  At the
September 1 global/Dairy Trading (gDT) event, prices for all
delivery period were higher to sharply higher.  The average
price for anhydrous milk fat was $4,681 per MT, 9.5% higher
than the previous event average; buttermilk powder prices
averaged $3,199, +10.6%; skim milk powder prices averaged
$3,197, +15.8%; and whole milk powder prices averaged $3,522,
+18.8%.  September is the first month that the gDT event will
occur twice a month.  The next event will be on Wednesday,
September 15.  Many traders and handlers felt that firmness
could occur at the September 1 event, but this firmness caught
many by surprise.  Traders and handlers indicate that it is
too early for them to respond to what impact the most recent
auction sentiment may have on prices.  Traders did say that
some buyers were holding off with their purchases until the
most recent event was held to see what auction trends might be
doing as many feel that a price bottom to recent weakness
might be near.  Oceania traders and handlers are stating that
order books are pretty full for the first half of the upcoming
milk production season.  Traders feel that once prices start
to firm, buyers will quickly return to the marketplace seeking
uncommitted volumes.


0930c

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STAT News Service