Oceania Dairy Market Overview

MADISON - Apr 25/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
NEW ZEALAND drought conditions have eased as widespread and
substantial rainfalls were received across the North Island.
The rains are a positive sign for the upcoming milk production
season.  The rains will help pasture regrowth and reseeding
projects.  The recent wet weather is too late to change or undo
the recent strategies of farmers drying off cows early and
culling cows.  The influence of the drought is established.
Current milk production is trending lower.  Processing plants
are reducing schedules and adjusting to the changes in milk
intakes.  February unadjusted milk production numbers, Dairy
Companies Association of New Zealand reports, are 5.9% lower
than February 2012.  Season to date output (June - February,
unadjusted) is 4.82% higher than the comparable year ago mark.
AUSTRALIAN milk production is showing steady to slight gains in
mid-April, yet output is not expected to gain enough traction to
reverse the seasonal output into positive territory.  The market
forces of weather, grain prices, and milk prices have been
working against the dairy farmer.  The higher dairy product
prices being reported now are likely to be slowly worked into
the milk prices.  Processors are expressing caution about what
pricing levels will start at for the upcoming production season.
The big concern would be the sustainability of current dairy
product prices across the season.  Increases in milk prices
during the season are welcomed by farmers; decreases are not.
According to Dairy Australia, milk production in Australia from
July - March is 1.6% lower (unadjusted for leap day in 2012)
than during the same timeframe a year earlier.  Season through
March, unadjusted regional changes are:  New South Wales, -0.2%;
Victoria, -1.2%; Queensland -5.7%; South Australia -3.9%;
Western Australia -1.5%; and Tasmania -3.1%.
Dairy product prices are mixed this reporting period.
Production levels are trending steady to lower, mainly
reflecting the milk output movements and seasonal declines.
Offerings are tight with traders/handlers servicing existing
accounts on the books and having little extra for other demand.
Skim milk powder prices retreated from recent spikes, yet remain
at relatively high levels.
gDT:  At the April 16th g/DT session #90, average prices for the
majority of products traded and contracting periods were higher,
with skim milk powder slightly lower.  The all contracts price
averages (US$ per MT) and percent changes from the previous
average are:  anhydrous milk fat, $4,964 +5.9%; butter, $4,721
+6.8%; buttermilk powder, $3,982 +1.3%; cheddar cheese, $4,753
+3.4%; lactose, not traded; milk protein concentrate, not
traded; rennet casein, $10,060 +7.2%; skim milk powder, $4,757 -
3.2%; and whole milk powder, $5,245 +2.4%.  The next event, #91,
will be on May 1.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service