Oceania Dairy Market Overview

MADISON - May 24/12 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:

Oceania milk producers and handlers are reporting that milk
volumes are noticeably declining.  The 2011 - 2012 milk
production season has been very positive in both New Zealand and
Australia, especially with a strong finish in both countries.
Milk producers are stating that the milking herd needs to
prepare itself for the upcoming season, thus the end of the
current season needs to occur.  Milk producers are very pleased
with the condition of the milking herd going into the winter
months.  The herd has not had a stressful end to the current
season and hopefully the winter months will not be overly
stressful.  Temperatures are starting to decline, thus fall is
in the air.  Milk production projections for the current year
remain positive.  New Zealanders continue to project a 9 - 10%
increase over the previous season while Australians are looking
at about a 4% increase.  Milk production in Tasmania, which is
included with Australian figures, is running about 10% stronger
than last year, which is helping boost Australian figures.  Milk
producers and handlers in all countries of the Oceania region
are optimistic about the upcoming season, but are very aware
that opening farm gate prices will potentially be lower than the
current year.  Farmers have had a positive year and are still
unsure how lower prices will impact their upcoming season.  As
the milk volume declines, manufacturing facilities that have
maintained more active processing schedules than anticipated are
now being shuttered or running on much reduced schedules.
Typically, manufacturing facilities use the down time for
maintenance, but many will need to compress this down time
maintenance period into a narrower range this year.  Up to this
point, the extra milk volume has been able to generate some
additional stocks that were previously not anticipated.  Much of
this additional stock was welcomed and provided a supply cushion
for late season commitments and also provided for enhanced
volumes of some products that cleared through the g/DT event.
Traders and handlers are stating that these end of season
volumes are declining and stock balance is generally in very
good shape for the upcoming winter season.  At the May 15 g/DT
session #68, rennet casein average prices increased 0.7% ($6,244
per MT) when compared to the previous all contract average,
while all others traded product averages were lower by 0.2% -
11.9%.  Skim milk powder, sourced from the U.S., again traded in
the closest contracting period (June) and averaged $2,395 per MT
($1.0864 per pound).  All other products and supply sources,
with the exception of buttermilk powder and lactose, saw
activity in contract #2 (July).  Anhydrous milk fat continues to
decline and realized an 11.9% decline ($2,499 per MT) from the
previous all contract average.  Skim milk ($2,573 per MT) and
whole milk ($2,546 per MT) powder averages were 5.4 and 8.9%
lower respectively.  Lactose did not see activity at this event.




0930c steve Schneeberger 608-278-4154

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STAT News Service