Oceania Dairy Market Overview

MADISON - May 23/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
      The NEW ZEALAND milk production season is moving towards
the lower point of the year.  Milk cows are being dried off or
culled.  The pasture conditions are poor to fair; only
marginally helped by recent rains.  The impacts of the cooler
weather and slowing of the growing season are noted.  More
processing plants are reducing schedules or closing on or before
schedule.  Overall, processing has been scaled back to products
of greatest needs as the milk flow has shorted ahead of most
projections.  The impact is muted because the reductions are
against a smaller base point in the milk production season.
Buyer interest is mixed for New Zealand products.  Some buyers
are still active in securing products and less worried about
pricing points.  Other buyers' needs were reduced as the pricing
points built higher in recent months.  In general, products for
orders on the books are moving along planned schedules.  March
milk production numbers, Dairy Companies Association of New
Zealand reports, are 16.8% lower than March 2012.  Season to
date output (June - March, unadjusted) is 2.7% higher than the
comparable year ago mark.
      AUSTRALIAN milk output is trending lower along seasonal
patterns.  The growing season is waning and grass and pastures
are less conducive to needs.  There has been mostly adequate
moisture, but temperatures are cooling.  More cows are being
dried off for the season.  Manufacturing milk supplies are
slowing and more plants are being shut down for maintenance and
idling.  Milk is moving to fresh products and consumer products.
Demand there is fair to good.  Several dairy companies are
announcing higher, season opening milk prices for the upcoming
season.  Price increases are a result of commodity prices and
favorable exchange rate expectations.  Current demand is fair to
good for commodity products.  Offering volumes are at low
levels.  The impact of the price volatility has affected
customers.  Early on, coverage was sought as prices increased.
With pricing now reversing from the recent highs, buyers are
becoming more strategic in purchasing.  Sales based on prior
commitments are moving on schedule.
      According to Dairy Australia, milk production in Australia
in April was 9.6% lower than April 2012, which recorded a 7.5%
growth from April 2011.  Seasonal milk output from July - April
is 2.3% lower (unadjusted for leap day in 2012) than during the
same period a year earlier.  Season through April, unadjusted
regional changes are:  New South Wales, -0.9%; Victoria, -1.9%;
Queensland -5.8%; South Australia -4.6%; Western Australia -
1.2%; and Tasmania -3.6%.  Dairy Australia is forecasting milk
production to reach 9.35 billion liters in 2012/13, down 1.4%
from 2011/12 output.
      gDT:  At the May 15th gDT session #92, average prices were
lower for most commodities, with rennet casein being slightly
higher.  The all contracts price averages (US$ per MT) and
percent changes from the previous average are:  anhydrous milk
fat, $4,598 -0.2%; butter, $3,846 -12.4%; buttermilk powder,
$3,876 -5.1%; cheddar cheese, not traded; lactose, not traded;
milk protein concentrate, not traded; rennet casein, $10,105
+3.7%; skim milk powder, $4,252 -2.8%; and whole milk powder,
$4,722 -1.7%.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service