Oceania Dairy Market Overview

MADISON - Apr 11/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
NEW ZEALAND milk production continues to be impacted by drought
conditions on the North Island and overall dry conditions
elsewhere.  At the farm level, the growing conditions for
pastures remains poor and cows are being dried off earlier than
desired.  Other producers are giving supplemental feeding, which
is increasing costs of production.  Farmers are concerned about
cow conditions for the start of the next milk season.  News
accounts are noting step-ups in milk prices.  Pasture conditions
are dry and the stands stressed.  Rainfalls are needed to
replenish water supplies.  Some forecast models are showing
rains in the next few weeks.  The decline in milk is creating
increased management of accounts on the books assessed against
holdings and future production.  Traders and handlers are being
strategic to meet customer requirements.  AUSTRALIAN milk
production continues to be impacted by dry conditions and the
effects of hot weather in recent months.  The milk budgets are
being forecast lower as the milk season progresses.  The impact
on product mix at the end of the season will be seen, but the
sentiment is that the orders on the books will be serviced.
Meeting the local demand is moving more milk towards those
needs.  Consumer interest is good and clearing expected volumes.
Milk production is running below year ago levels as the season
winds down.  From July - February, the seasonal totals reported
by Dairy Australia are running 1.1% lower (unadjusted for leap
day in 2012) than during the same timeframe a year earlier.
Season through February, unadjusted figures are:  New South
Wales, -0.6%; Victoria, -0.6%; Queensland -5.5%; South Australia
-3.6%; Western Australia -1.5%; and Tasmania -2.0%.  Dairy
product prices are higher to sharply higher.  The impacts of the
gDT auction results are creating reactions in the marketplace.
Higher prices are creating more tension in the marketplace.
Some ingredient buyers are seeking coverage and willing to pay
the prices with the ability to cost average the impact of the
current market prices against other holdings.  Other buyers are
out of the market at the current pricing levels.
gDT:  At the April 2nd gDT session #89, average prices for the
majority of products traded and contracting periods were higher
and were sharply higher for skim milk powder.  The all contracts
price averages (US$ per MT) and percent changes from the
previous average are:  anhydrous milk fat, $4,695 +6.7%; butter,
$4,425 -2.7%; buttermilk powder, $4,595 +0.8%; cheddar cheese,
$4,622 +6.6%; lactose, not traded; milk protein concentrate, not
traded; rennet casein, $9,489 +4.4%; skim milk powder, $5,142
+27.8%; and whole milk powder, $5,100 +7.0%.  The next event,
#90, will be on April 16.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service