Oceania Dairy Market Overview

MADISON - Oct 24/13 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  AUSTRALIAN milk production is at or near the seasonal
peak.  Current production is trending 1-2% below last year, but industry
analysts forecast year end totals to be about level with last year.  Tasmania
has experienced cold, wet weather, causing decreased cow comfort levels and
some marginal decreases in milk production.  Victoria has also experienced
wet weather conditions.  Weather forecasters view the El Ni¤o/La Ni¤a factors
as neutral and foresee average seasonal weather conditions for the next 3-4
months. Pastures are green and growing and viewed as in generally good
condition.  A processor has increased farmgate prices for Victoria and New
South Wales.  From November 2013 through June 2014, suppliers will have their
milk prices increased, taking the companies "model farm" annual price to
$6.30 kg/MS.  Producers remain in a tight financial situation with tight
margins.  Even with improved farmgate prices, numerous producers seem adverse
to risk and hesitant to expand operations.  Dairy product prices have been
trending higher in the export producing areas, while holding steady in the
domestic dairy producing regions.  According to Dairy Australia, September
milk production in Australia was 3.5% below September 2012.  The state
changes from a year earlier are:  New South Wales, -5.7%; Victoria, -2.7%;
Queensland, -8.1%; South Australia, -5.3%; Western Australia, -5.0% and
Tasmania -2.5%.  NEW ZEALAND milk production in August was reported by DCANZ
at 1,330,000 tons, up 9.2% from August last year and 24.7% higher than two
years ago.  Current milk production is near the seasonal peak with estimates
of a 4% increase over last year.  A few storms have marginally reduced milk
production and component levels.  Pastures are seen as in generally good
condition.  The new manufacturing plant in Darfield is operating at full
capacity and assisting with the increased milk volumes.  Dairy manufacturers
are keying production schedules off the strong demand for whole milk powder
from China and opting to channel additional milk volumes for WMP production.
At the October 15 GDT event #102, average prices ranged from 5.2% lower to
1.7% higher from the prior event across categories.  The all contracts price
averages (US$ per MT) and percent changes from the previous average are:
anhydrous milk fat, $5,007 -1.2%; butter, $3,780 -3.5%; buttermilk powder,
$4,680 -5.2%; cheddar cheese, $4,326 -1.7%; lactose, n.a.; milk protein
concentrate, $7,401 +1.7%; rennet casein, $9,880 +1.5%; skim milk powder,
$4,541 +0.7%; and whole milk powder, $5,058 -2.9%.
0930c rick.whipp@ams.usda.gov 608.278.4151
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: www.marketnews.usda.gov/portal/da

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STAT News Service