Oceania Dairy Market Overview

MADISON - Jun 5/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production remains steady with recent weeks under mild
temperatures and adequate rainfall.  Dairy Australia's situation and outlook
report had July-April production at 0.8% below the previous year.  Producers
are being prompted to make as much milk as possible under the current farm
gate price, given prices for next season are projected to be lower than they
are now.  Current milk production volumes are being channeled to the nearest
available processor, as numerous plants are undergoing yearend planned
maintenance projects.  The timely autumn rains have prompted some good grass
growth and hay supplies are at more than adequate levels in the southern,
dairy export-focused, regions.  However, high protein hay is less available
than in previous years.  Dairy cattle exports from Australia are running
above last year, with China the main destination point.  According to an
industry survey, Australian farmer confidence is at a three year high with
40% of farmers expecting the agricultural economy to improve, up from 29% for
the previous survey.  Dairy farmers were the most upbeat about their
prospects for the coming year.  According to Dairy Australia, Australian
production of various dairy commodities for March 2014 showed the following
percentage changes compared to 2013; butter, +12.9%; butteroil, -33.4%; skim
milk powder, -6.3%; whole milk powder, +0.2%; buttermilk powder, +7.7%;
cheese, -7.3%; and whey powder, -11.6%.
NEW ZEALAND milk production has entered the typical low production period for
the year.  Some producer cooperatives indicate that over half of the cows
have been dried off and moved to winter pastures.  Some manufacturers are
conducting maintenance projects and are shut down.  Five infant formula
manufacturers have gained approval to export into China with other companies
making modifications to gain approval.   Eucolait pegged total whole milk
powder imports into China for April, 2014 at 88,700 metric tons, down from
March, but significantly above year ago levels.  New Zealand was the main
benefactor of China's April whole milk powder imports.  At the June 3 GDT
event #117, average prices ranged from 10.2% lower to 8.0% 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,
$4,058 -5.0%; butter, $3,634 unchanged; buttermilk powder, $3,628 -1.9%;
cheddar cheese, $4,236 +8.0%; lactose, n.a.; milk protein concentrate, n.a.;
rennet casein, $10,672 -10.2%; skim milk powder, $3,863 +2.1%; and whole milk
powder, $3,594 -8.5%.
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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