Oceania Dairy Market Overview

MADISON - Jun 7/12 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:

For the most part, the Oceania milk production season is
finished for the 2011 - 2012 fiscal year which ends at the end
of the month.  Milk output during the current season has been
very favorable, especially the second half.  In New Zealand,
milk producers and handlers are looking at a strong 9% increase
over the previous year, while in Australia, milk handlers are
projecting a positive 4% increase.  Manufacturers and handlers
in both countries welcomed the extra milk which provided
additional volumes for manufactured dairy products at a time of
the season, when often milk volumes are short of full needs.
The additional manufactured stock provided a cushion to
seasonally declining inventories and also provided additional
volumes to be offered on the g/DT twice month event for those
products traded.  Traders and handlers are indicating that buyer
interest is limited as buyers are fully aware of limited
offerings at this time.  Traders do indicate that commitments
for the upcoming third quarter of the year are well in place and
order books are starting to be filled.  Some potential buyers
are also looking at booking for fourth quarter needs, but these
negotiations are slow to finalize.  Winter weather pattern are
now being reported in most Oceania regions.  Cold temperatures
are being reported in New Zealand with moisture not excessive.
Temperatures are cooling and moisture is falling in much of the
Victoria region of Southeast Australia.  Moisture in Western
Victoria has been limited for late summer and fall, but now
rainfall is being reported in this region.  In the Gippsland
region, milk producers had been struggling with excessive
rainfall and flooding for much of the current milk production
season, but were realizing drier condition later in the summer,
but once again, heavy rainfall and renewed flooding is being
reported.  Early in the week, traders and handlers were
speculating on the outcome of the upcoming g/DT event.  Many
felt that declining price trends of recent events would cease
and stability and slight strength would once again occur.   At
the June  g/DT session #69, lactose prices eased a little from
for previous trading event, but all other products were higher
to sharply higher when compared to the previous event.
Percentage changes from previous all contract prices are:
anhydrous milk fat +24.4%; buttermilk powder had no percentage
change comparable, but averaged $2,456 per MT; cheddar cheese
was +9.4%; milk protein concentrate +10.9%; casein +19.6%; skim
milk powder +21.3%; and whole milk powder was +8.5%.  Traders
and handlers were reporting that overall commercial pricing was
starting to show signs of strength prior to the trading event
and now they indicate that this firmness will once again re-
energize buyer interest.  Traders and handlers were also
projecting firmer g/DT prices since all contracting periods will
be in the new milk production season which resumes July 1.
Trading activity for Oceania sourced dairy products occurred in
more contracting periods than at recent events, especially with
milk production increasing or maintaining high levels during the
six contracting periods (July - December 2012).




0930c steve Schneeberger 608-278-4154

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