Oceania Dairy Market Overview

MADISON - Apr 12/12 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:

Milk production continues to trend seasonally lower in New
Zealand and Australia, but is finishing the season in a very
positive fashion.  The additional, unforeseen, milk volumes are
providing additional late season manufacturing that is providing
some cushioning to supply/demand balance.  In most instances,
this late season output is clearing the marketplace with minimal
problems.  In New Zealand, late summer and early fall weather
patterns are quite conducive to milk output.  Sufficient
moisture, mild temperatures, and sunny days are providing for
good pasture growth as the season winds down.  Milk output on
both the North and South Islands is running stronger than the
previous year with output for the country running very near 10%
ahead of last season.  Much of this growth is being attributed
to the strength at the end of the season.  In Australia, weather
conditions remain quite favorable for early fall.  The heavy
rainfall about 6 weeks ago and subsequent flooding in Northern
regions of Victoria has ended.  Water levels in the affected
area did not dissipate quickly, but now most of the water is
gone, but farmers now have to deal with the after effects.
Standing water for much of this time has greatly impacted
pasture and paddock conditions.  Most of the paddocks will need
to be reseeded, thus limiting grazing opportunities for the
balance of this season.  Although this Northern Victoria region
was negatively impacted by flooding and subsequent milk
production disruptions, overall milk output in Australia
continues to register about a 4% increase over last season.
Traders and handlers are indicating that sales activity is quiet
and most market activity is centered around previous
commitments.  At the April 3 g/DT event, outside of skim and
whole milk powder, all product price averages were higher.  At
this event, two new suppliers offered product on the auction.
Skim milk powder was also offered from Europe and lactose was
offered from Australia.  Within the next week or so, the g/DT
platform will announce the results of a formal rule change
proposal pertaining to an adjustment to contract shipping
periods effective May 1.  Since the event started in 2008, a mix
of contracts involving one and three month shipment periods were
available.  The new proposal would make six monthly contracting
periods and would run consecutively beginning with the month
following any given event.  This proposed rule change will
potentially make it easier for buyers and sellers to manage
their purchases and commitments.


0930c steve Schneeberger 608-278-4154

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