Oceania Dairy Market Overview

MADISON - Jun 21/12 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:

The Oceania milk production season officially comes to an end at
the end of the month and is finishing on a very positive side.
Milk output during the current season (July - June) developed
much stronger than early projections, especially during the
second half of the season.  In New Zealand, end of season
figures are pointing to a positive 9 - 10% increase over the
previous season.  Australia also realized a positive second half
and is projected to finish the year around 4% stronger.  As the
winter season nears, conditions in both New Zealand and
Australia are quite typical for this time of the year.
Temperatures are declining and late fall rainfall is common.  In
Australia, some areas of Victoria, especially in the Gippsland
region, have again experienced heavy rainfall and flooding
conditions which producers in this region have had to contend
with for much of the current season.  In other areas of
Victoria, rainfall has occurred and, in most instances, is
enhancing moisture levels for upcoming spring and summer needs.
Outside of year round processing facilities, most plants are now
idle and winter maintenance is being performed.  Traders and
handlers are indicating that prices are starting to firm.  Many
feel that recent price levels might have been at the bottom of
the current cycle and now prices are trending higher as
suppliers look forward to the new milk production season and
marketing year.  Currently, some international buyers are
looking to the Oceania region for spot availability, but are
finding uncommitted volumes quite limited.  Manufacturers,
handlers, traders and potential buyers are in the negotiation
stages for Q3 and Q4 needs.  A significant portion of first half
milk production has already been committed to regular and
ongoing customer needs.  At the June 19 g/DT session #70,
average contract prices were better received by the industry
than the higher to sharply higher trends two weeks ago.  Many
manufacturers and handlers reference the g/DT event as a
marketing tool to establish their prices for the future and feel
that many of the weaker adjustments at this event occurred in
response to stronger than necessary adjustments two weeks ago.
Percentage changes from previous all contract prices are:
anhydrous milk fat -0.8%; buttermilk powder +2.5%; cheddar
cheese was -3.7%; milk protein concentrate -2.7%; casein -1.9%;
skim milk powder -4.8%; and whole milk powder was +2.7%.
Traders and handlers are reporting that overall commercial
pricing continues to show strength and most feel that this trend
will encourage international buyers to return to the market
place.




0930c steve Schneeberger 608-278-4154

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STAT News Service