STAT Communications Ag Market News

Oceania Dairy Market Overview

MADISON - Nov 20/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production is mixed coming off the seasonal peak.  Some
regions, especially southwestern Victoria, have accelerated declines in milk
production due to persistent dry weather.  Other areas are showing production
about even or a little above year ago levels with the exception of Tasmania,
where production is significantly above last year.  Australia and China have
tentatively agreed in principle to a Free Trade Agreement.  The FTA will
remove all tariffs on Australian dairy products within 4-11 years.  The
agreement should allow Australian dairy products to be more competitive with
New Zealand's products and likely increase Oceania's share in the China
market.  According to Dairy Australia, silage production is coming to a close
in Southern Australia with mixed production results.  Hay prices continue to
be volatile with yields and supplies not fully realized for the current
harvest.  Conditions have been favorable for baling with variable yields.
Hay quality is above average in most areas.  Hay prices for this season are
expected to be above year ago levels.  According to Dairy Australia,
production of various dairy commodities for September 2014 showed the
following percentage changes compared to 2013: butter, +16.6%; butteroil,
+61.3%; skim milk powder, +32.0%; whole milk powder, -40.8%; buttermilk
powder, +23.8%; cheese, +3.2%; and whey powder, -20.7%.
New Zealand milk production continues to be above year ago levels.  The North
Island has received much rain, but conditions remain favorable for milk
production.  The southern portion of the South Island has received some cold
weather, which has restricted production gains in some areas.  Estimates for
October have milk production for all of New Zealand near 4.3% above year ago
levels.  Pasture growth is very good.  Farmgate prices are below year ago
levels.  Some contacts have indicated they believe producers will refrain
from supplemental feeding, given the lower farmgate prices.  They anticipate
producers will make milk as for as long as pastures allow and then dry off
cows earlier this season than last.  September milk production as reported by
DCANZ was 2.75 million MT, up 5.2% from September 2013 and 13.0% higher than
the level two years ago.  September milksolids reflected a 5.7% increase
compared September 2013.  At the November 18 GDT event #128, average prices
ranged from 12.2% lower to 6.1% 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, $3,490 +6.1%; butter,
$2,656 +6.0%; buttermilk powder, $2,511 +1.4%; cheddar cheese, $2,861 +5.0%;
lactose, n.a.; rennet casein, $6,681 -12.2%; skim milk powder, $2,299 -5.7%;
sweet whey powder, n.a.; and whole milk powder, $2,400 -5.1%.
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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