Oceania Dairy Market Overview

MADISON - Mar 14/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
The NEW ZEALAND milk production trend is moving lower seasonally
and further pulled downwards because of dry conditions.  A
drought designation was declared for many regions of the North
Island.  Pasture conditions have deteriorated and the resulting
lack of feed is causing a sharp decline in milk production.
Supplemental feeding is being done on some farms to keep cows in
milk.  Some producers have moved to once per day milking or a
longer than normal spacing of the milking times to cope.  Other
farmers are drying off cows earlier than planned.  Additionally,
cow slaughter rates are increasing for those who do not have the
feed or resources to keep fully stocked.  Processors, trade
organizations, government agencies, and financial institutions,
are offering advice and assistance for farmers affected by the
drought conditions.  Processing plants are running on reduced
schedules with product needs influencing where the milk is being
placed.  AUSTRALIAN milk production is also being affected by
hot and dry conditions in major output areas.  Many locations
are seeing record March consecutive days with temperatures above
30 degrees Celsius (86 degrees F).  Cows are not fond of the hot
conditions and pasture growth is being impacted.  Current milk
output is trailing year ago numbers.  Milk prices are being
stepped up by several processors due to improvements in dairy
product prices and trading conditions.  The high AUS Dollar rate
continues to impact export returns for some traders.  Dairy
product prices for butter, SMP, WMP, and cheese are all sharply
higher when compared to recent weeks.  The impact of the drought
conditions and the decline in milk receipts has created tighter
supply conditions across product categories.  Demand interest is
fair to good with some buyers seeking to secure additional
coverage.  Many are not finding all the offerings that they
desire.
g/Dt:  At the March 5th g/DT session #87, average prices for all
products traded and contracting periods were higher to sharply
higher.  Average prices for all contracting periods and
individual products ranged from 1.2% to 18.0% higher.  The all
contracts price averages (per MT) and percent changes from the
previous average are:  anhydrous milk fat, $3,820, +4.9%;
butter, $4,081, +9.6%; buttermilk powder, $4,200, +14.3%;
cheddar cheese, $3,827, +8.3%; lactose, not traded; milk protein
concentrate, $6,749, +11.0%; rennet casein, $8,930, +1.2%; skim
milk powder, $3,759, +4.6%; and whole milk powder, $4,298,
+18.0%.  The next event, #88, will be on March 19.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

---

STAT News Service