Oceania Dairy Market Overview

MADISON - Jun 25/15 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Milk production in Australia is steady at seasonally low levels with year to
date production ahead of last year.  Conditions over most of the major dairy
producing areas are favorable for milk production.  Some areas are drier than
producers would like and they are purchasing additional forage supplies to
compensate.  Manufacturers are continuing to cycle through their yearly
maintenance projects as they prepare for the beginning of the new season.
Most export markets have a weak undertone as global supplies are abundant and
demand from China and Russia remains low.  Dairy Australia's National Dairy
Farmer Survey results indicated 74% of Australian farmers have a positive
outlook about the future of the dairy industry and 79% anticipate a profit in
the current season.
According to Dairy Australia, production of various dairy commodities for
April 2015 showed the following percentage changes compared to 2014: butter,
+0.4%; butteroil, +27.7%; skim  milk powder, +44.8%; whole milk powder, -
0.7%; buttermilk powder, +8.4%; cheese, +3.9%; and whey powder, -8.1%.
New Zealand's milk production is at nominal levels as a large majority of
producers have dried off most of their cows for the season.  Heavy rains have
caused major flooding on the southern portion of the North Island.  It is too
early to fully assess what impact the flooding will have on the dairy
industry.  Initial comments from contacts in New Zealand believe the floods
will have minor impact to the industry, despite substantial damage to
personal property in some areas.  Manufacturers are eager to get sales on the
books for the start of the upcoming 2015/16 production year.  Information
released regarding the results of the Algerian (ONIL) tender for
approximately 60,000MT of whole and skim milk powder revealed substantial
volumes awarded to New Zealand.  These sizable awards will provide some
relief over concerns of expanded, uncommitted supplies.
The latest Situation and Outlook report from the Ministry of Primary
Industries anticipates milk solids for the upcoming 2015/16 season to fall
1.35%.  Reasoning behind the decline is the expectation of reduced
supplemental feeding as dairy producers attempt to trim costs of production,
given lower farmgate prices.
At the June 16 GDT event #142, average prices ranged from 8.9% lower to 10.0%
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, $2,814 -8.9%; butter, $2,707 +3.3%; buttermilk powder,
$1,975 +10.0%; cheddar cheese, $3,128 +2.4%; lactose, $525 -2.8%; rennet
casein, $6,126 +4.3%; skim milk powder, $1,978 -0.2%; sweet whey powder,
n.a.; and whole milk powder, $2,327 -0.1%.
0930C rick.whipp@ams.usda.gov  608.557.7004
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

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STAT News Service