Oceania Dairy Market Overview

MADISON - Nov 6/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production has peaked in most states with intakes above year
ago levels.  Domestic dairy commodity stocks are rebuilding with additional
supplies available for the export market.  Concerns are growing regarding the
dry conditions, especially in southwest Victoria.  The dry conditions will
reduce grazing and force producers to start supplemental feeding if rains do
not come soon.  The dairy markets have a bearish undertone with some analysts
are not seeing a rebound in the current trends until mid-2015.  Some
cooperatives have scaled back their financial profit outlooks for the 2014-15
production year noting expanded global milk supplies, lower dairy commodity
prices and greater market uncertainty as contributing factors.  According to
Dairy Australia, September 2014 milk production in Australia was 4.2% above
September 2013. The state changes from a year earlier are: New South Wales,
+1.8%; Victoria, +3.9%; Queensland, -4.4%; South Australia, +0.4%; Western
Australia, +6.1% and Tasmania +16.2%.  Dairy Australia reports Australian
production of various dairy commodities for August 2014 showed the following
percentage changes compared to 2013: butter, -3.1%; butteroil, +10.4%; skim
milk powder, +0.4%; whole milk powder, -42.6%; buttermilk powder, -1.8%;
cheese, +9.6%; and whey powder, +1.1%.  Dairy Australia reports dairy product
exports for the July-September period totaling 161.8 thousand MT, up 8.3%
from the year ago period. The skim milk powder (SMP) exports were up 54% for
the same period last year. The total value of exports for the July-September
period is down 2.5%.
New Zealand milk production is very strong with volumes above year ago
levels.  The seasonal peak in production will be reached this week in some
areas with volumes at or exceeding historic highs.  Weather conditions are
favorable and pastures and feed supplies are in good condition.  Processors
are attempting to clear the heavy milk volumes as quickly as possible.
August milk production as reported by DCANZ was 1.39 million MT, up 4.5% from
August 2013 and 14.1% higher than the level two years ago.  August milksolids
reflected a 6.2% increase compared August 2013.  At the November 4 GDT event
#127, average prices ranged from 9.2% lower to 1.6% 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, $3,292 -
1.6%; butter, $2,505 -4.1%; buttermilk powder, $2,426 -6.9%; cheddar cheese,
$2,728 -9.2%; lactose, n.a.; rennet casein, $7,608 -2.2%; skim milk powder,
$2,457 -1.2%; sweet whey powder, n.a.; and whole milk powder, $2,522 +1.6%.
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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