Oceania Dairy Market Overview

MADISON - May 9/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
NEW ZEALAND milk production trends continue to lower and total
volumes are tracking below year ago levels.  The milk season is
winding down and coming to a harder close than normal year
projections.   The effects of the lower milk output this season
and impacts on finished dairy products have mostly been absorbed
by the market.  The implications of the recent rainfalls are
limited on current milk output.  The decisions made to cull or
dry off cows are not changeable, so those categories are not
going to see any influences because of the rains.  The positives
are that farmers are able to position cows to have better
conditioning for next season, along with allowing pastures to be
in better shape.  Rains have been common over much of the North
Island.  News reports are indicating flooding in various areas.
Yet, some areas remain drier than normal.  Producers are making
plans to best utilize their existing feed stocks during the off
season.  Currently, processing plants are running on reduced
schedules and processors are closing down plants in incremental
ordering to facilitate the decline in milk receipts.  Total
season milk projections are now expected to be around to
slightly lower than last season's mark.  AUSTRALIAN milk
production is trending lower and tracking at levels below year
ago marks.  While conditions have stabilized in April and
brought more normalcy to the milk production curve, there are
concerns about getting the herds and pastures in shape for next
season.  Farmers are feeding supplemental feedstuffs to augment
the feed shortages.  The impact of weather, feed costs, and time
of season, are all playing a role in the declining milk
receipts.  Milk price step ups are being seen, helping
financials at the farm levels and providing a bearish tone to
the upcoming season.  Processing plants are scaling back and
focusing on local, consumer products and export products of
greatest needs/values to satisfy customer demand and maximize
returns.  Other processors are catching up on past orders.
Dairy product prices are retreating from recent seasonal high
levels.  Demand became more uneven as the pricing levels reached
higher points.  Buyers are less aggressive in pushing prices and
the drop in demand was expected as near-term coverage became
more common and buyers were reluctant to be in the market at the
high prices.  Any concerns about Chinese import restrictions are
generally being allayed.  There were sharp increases in import
levels ahead of the new regulations on May 1.  The bulk of the
New Zealand season has passed.  gDT:  At the May 1st gDT session
#91, average prices were trending mostly lower.  The all
contracts price averages (US$ per MT) and percent changes from
the previous average are:  anhydrous milk fat, $4,675 -5.2%;
butter, $4,409 -6.7%; buttermilk powder, $4,500 -3.3%; cheddar
cheese, $4,800 +3.4%; lactose, not traded; milk protein
concentrate, not traded; rennet casein, $9,745 -3.1%; skim milk
powder, $4,280 -9.5%; and whole milk powder, $4,721 -10.2%.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service