Oceania Dairy Market Overview

MADISON - Jun 20/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  NEW ZEALAND milk production is trending lower
at or near seasonal lows.  Processing plants continue to be
stepped down for end of season maintenance and to maximize
efficiencies.  Milk output levels are down sharply when compared
to year ago levels, unofficial counts are often more than 30%
lower in May.  This is a continuation of the poor results seen
in March and April.  According to DCANZ, April milk production
was 34.5% lower than April 2012.  The June - April output, at
18.9 million tons, is running 0.2% lower than the previous
season.  Farmers began to cull heavier and earlier to compensate
for the drought conditions.  The trade notes that the market has
compensated for the declines.  The effects are mitigated due to
the low point of the milk season and that traders/handlers began
to back off future sales against the declining milk forecasts.
Moisture conditions are improving with widespread, heavy rains
over the North and South Islands.  Groundwater is being
replenished and pastures are being revitalized for the upcoming
season.
AUSTRALIAN milk production trends are expected to continue at
the light side of normal with projections being eased lower.
Weather conditions have become wetter during the fall season.
The impact on the pasture and growing conditions is limited
because of cooler weather limiting any growth.  The
precipitation is welcomed as farmers look ahead to the new
season.  Processors and coops are announcing higher milk prices
for the upcoming season, at levels up 20% or more than for last
season's start.  This is also anticipated news as farmers plan
the financials.  The declining Australian dollar value is
positive for exporting.
Dairy product prices are steady to lower.  The market test is
generally light with limited commodity products available to be
offered.  There are some odd lot offering and other offers
because of fiscal year end considerations.  Some limited resale
loads are indicated to be available.  Demand is light for the
current market conditions with buyers filling nearby needs from
other country sources.  Negotiations for new season products are
building.
gDT:  For the June 18 gDT session #94, the all contracts price
averages (US$ per MT) and percent changes from the previous
average are:  anhydrous milk fat, $4,589 +1.7%; butter, $3,925
+4.7%; buttermilk powder, $4,315 -2.2%; cheddar cheese, $4,578 -
6.5%; lactose, not traded; milk protein concentrate, not traded;
rennet casein, $9,707 n.a.; skim milk powder, $4,284 +3.2%; and
whole milk powder, $4,668 +2.2%.
Notice:  Report 27 will be released at 1:00pm CT on Wednesday,
July 3rd, in advance of a U.S. holiday.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service