Oceania Dairy Market Overview

MADISON - Jan 8/15 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production is on its typical seasonal downward trend.  Dry
conditions in some areas have accelerated milk production declines in those
regions.  Current market outlooks estimate this season's production to be
about equal to last year.  Trading activity has been slow to develop beyond
the holiday period as market participants are waiting for an indication as to
how the market will move in the New Year.  Hay demand declined over the
holiday period and resulted in  a leveling off of hay prices.  Supplies of
high quality hay are in short supply.  Dairy producers in Victoria are
increasingly looking for vetch hay as their pastures dry out.  Many growers
and traders of vetch have a majority of their supplies either contracted or
sold.  According to Dairy Australia, November 2014 milk production in
Australia was 3.0% above November 2013. The state changes from a year earlier
are: New South Wales, +7.9%; Victoria, +1.9%; Queensland, -5.6%; South
Australia, -2.4%; Western Australia, +5.2% and Tasmania +11.9%. Australia's
milk production season to date (July-November) is +3.5%, compared to last
season.   Dairy Australia also reported, production of various dairy
commodities for October 2014 showing the following percentage changes
compared to 2013: butter, +9.9%; butteroil, +14.2%; skim milk powder, +11.0%;
whole milk powder, -9.5%; buttermilk powder, +8.1%; cheese, +13.3%; and whey
powder, -2.5%.
The combination of low payout prices and hot, dry weather, which is limiting
pasture growth, are bringing about accelerated declines in New Zealand's milk
production.  Dry conditions cover all of New Zealand, but are more severe on
the South Island and have resulted in numerous wildfires.  Dairy product
trading has been very light over the yearend holiday period.  Manufacturers
will be keeping a close eye on milk production declines and available
supplies to ensure that future contract commitments can be met.  At the
January 6 GDT event #131, average prices ranged from 1.6% higher to 13.2%
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, $4,493 +6.8%; butter, $3,558 +13.2%; buttermilk powder,
$2,736 +10.5%; cheddar cheese, $3,090 +3.2%; lactose, n.a.; rennet casein,
$7,911 +4.2%; skim milk powder, $2,386 +2.8%; sweet whey powder, n.a.; and
whole milk powder, $2,307 +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: http://www.marketnews.usda.gov/mnp/da-home

---

STAT News Service