Oceania Dairy Market Overview

MADISON - May 10/12 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:

The Oceania milk production season continues to run stronger
than milk producers and handlers had previously projected for
this time of the season.  Milk volumes in both New Zealand and
Australia are finishing the production year very positively.  In
New Zealand, milk output continues to run between 9 - 10% higher
than last year at this time and is 4 - 5% higher in Australia.
Some Australian milk handlers are projecting that overall annual
production will be at 4% to slightly under.  Fall temperatures
are starting to cool which is slowing pasture growth, thus feed
quality and quantity are trending lower.  Up to this point, feed
and pasture quality have been positive.  In Northern Victoria,
plentiful water volumes have been retained during the current
production season to be sufficient for irrigation needs for the
next few years.  In Western Victoria, limited moisture
conditions were reported in early fall, although recent rainfall
is helping alleviate moisture shortages, but will have limited
positive impact on current year pasture growth and feed quality.
The Gippsland region of Victoria has had a very wet production
season and producers in that region are hopeful that winter
moisture will be manageable so that they can begin a new
production season on a positive note.  Most all milk producers
in both New Zealand and Australia are reporting that herd
conditioning going into the winter is very good.  Many are
stating that if winter weather patterns are typical, a positive
start to the new season should be forth coming.  In many
instances, manufacturing facilities in both New Zealand and
Australia are operating further into the fall than is typically
the case, thus winter maintenance schedules are being pushed
back.  Late season milk volumes, thus additional manufactured
dairy product stocks, are providing for some late season
supply/demand cushioning and also additional volumes are being
offered at the Global Dairy Trading (g/DT) event.  At the May 1
g/DT session #67, with the exception of cheddar cheese (+3.1%)
and lactose (+3.0%), all contract price averages were lower to
sharply lower (0.5% - 13.6%) when compared to the previous
event.  At this event, the contracting periods were changed and
will be monthly for 6 consecutive months starting with the month
following the event, thus the 6 contract months for the May 1
event will be June - November.  Contract #1 (June) again had
activity in skim milk powder sourced from the U.S. and Europe
and for the first time, whole milk powder sourced from New
Zealand.  U.S. and European sourced skim milk powder was also
again offered during contract #2.  Australian sourced lactose
was offered and sold for contracts 3, 4, and 5 (August,
September, and October).


0930c steve Schneeberger 608-278-4154

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STAT News Service