Oceania Dairy Market Overview

MADISON - Oct 23/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production is near the seasonal peak.  Milk flows going into
manufacturing facilities are heavy with most plants operating at near
capacity.  Supplies for all dairy commodities are building.  Weather
forecasts for South Australia are calling for continued dry weather.
Temperatures are increasing with highs approaching 30 degrees Celsius.  The
increased temperatures are quickly drying out those areas that do not
irrigate.  The dry conditions have already significantly reduced anticipated
crop harvests.  Dairy Australia reports increased hay price volatility as
overall hay yields are being downgraded, due to the lack of rain.  Dairy
producers needing hay are being urged to talk to their suppliers now.  Higher
water costs and lower yields will continue to impact hay supplies in the
major dairy producing regions.  According to Dairy Australia, Australian
production of various dairy commodities for July 2014 showed the following
percentage changes compared to 2013: butter, -14.8%; butteroil, +38.5%; skim
milk powder, -1.2%; whole milk powder, -8.8%; buttermilk powder, +17.1%;
cheese, +1.6%; and whey powder, -23.1%.
New Zealand milk production is nearing its seasonal peak.  Weather conditions
are favorable for milk production with year to date preliminary estimates
showing production 5% above year ago levels.  Rainfall is more than adequate
and warmer temperatures are prompting good forage growth.  Manufacturers are
operating at or near maximum capacity in order to clear the incoming milk
supply.  Farmgate prices have seen some step downs with the likelihood of
additional decreases in the future.  At the October 15 GDT event #126,
average prices ranged from 5.3% lower to 7.4% 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, $3,346 +7.4%;
butter, $2,614 +3.9%; buttermilk powder, $2,685 -3.8%; cheddar cheese, $3,007
-1.0%; lactose, n.a.; rennet casein, $7,780 -5.3%; skim milk powder, $2,462 -
3.6%; sweet whey powder, $1,225 +4.3%; and whole milk powder, $2,503 +3.1%.
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