Oceania Dairy Market Overview

MADISON - Sep 26/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  AUSTRALIAN milk production patterns are
trending higher on a seasonal basis.  Milk growth is
progressing, yet total levels are trailing last year by several
percentage points.  There was a stronger start to last season and
the comparisons are based on numbers progressing at different
levels.  Weather conditions are good.  Water levels are in
positive shape for the growing season for pastures and crops.
Farm financials are beginning to be more favorable, following a
year of transition.  Processing plants are working well as milk
intakes are building.  According to Dairy Australia, August milk
production in Australia is 4.7% lower than August 2012.  The
state changes from a year earlier are:  New South Wales, -4.7%;
Victoria, -4.4%; Queensland -4.3%; South Australia -8.6%;
Western Australia -1.8%; and Tasmania -7.3%.  NEW ZEALAND milk
production in July was recorded by DCANZ at 185,000 tons, down
5.1% from July 2012 but 14.2% higher than two years ago.
Another trade report indicates that milk production in the first
three months of the season (June - August) was 3.4% higher than
the same period a year ago.  The milk production season is
ramping higher in NEW ZEALAND.  Conditions are favorable for the
milking herds.  Weather has been moderate with adequate to
moderate rainfall.  Pastures are seeing amazing growth in some
regions.  There are some local concerns about conditions
becoming too wet and affecting the quality as cows graze.
Another forecast is for the seasonal total to be 6% higher with
increased cow numbers and higher milk prices being major
reasons.  A new drying processing plant is operational and
working well on the South Island.  Dairy product markets are
seeing fair to good demand across product categories.  There is
good buying interest from China and other exporting partners.
Trade sources report that Chinese demand is higher as they
compensate for declines in fresh milk supplies, said to be
around 5-6% lower than a year ago.  Buyers are looking to
replace the lack of production by importing more dairy products,
especially whole milk powders.  The impact is tightening up
supplies in Oceania and keeping WMP pricing rather firm around
the $5,000 per MT mark.  Butter price trends are higher,
reflecting good demand.  Traders/handlers are noting good demand
from Russia.
At the September 17 GDT event #100, average prices ranged from
3.3% lower to 5.2% higher from the prior event across
categories.  The all contracts price averages (US$ per MT) and
percent changes from the previous average are:  anhydrous milk
fat, $4,940 -3.3%; butter, $3,911 +5.2%; buttermilk powder,
$4,805 +2.2%; cheddar cheese, $4,295 +1.0%; lactose, n.a.; milk
protein concentrate, $7,569 -0.6%; rennet casein, $9,825 -0.4%;
skim milk powder, $4,330 -1.7%; and whole milk powder, $5,096
+1.1%.
0930c Butch Speth Butch.Speth@ams.usda.gov 608.278.412

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STAT News Service