Oceania Dairy Market Overview

MADISON - Jan 16/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
AUSTRALIAN milk production has begun to decline at an accelerated pace as
Victoria, South Australia and portions of New South Wales are in the midst of
an intense heat wave.  Temperatures well over 100 degrees Fahrenheit are
lowering cow comfort levels and impacting milk production.  Weather prior to
the current heat wave held up fairly well during December and into January,
according to various contacts, with milk production above expectations in
some areas.  The current heat wave has caused numerous fires and once green
pastures will soon yellow and wither without additional rains or irrigation.
Production of all dairy products has slowed as milk volumes have declined.  A
majority of available supplies of dairy products for the first quarter are
committed with premiums required to secure spot loads in the near term.
Export interest remains strong, especially for skim and whole milk powders.
China continues to be very active in the various dairy powder markets as they
try to offset their domestic milk production shortfalls.
NEW ZEALAND milk production continues to show projected increases of 6% or
better over last year's drought shortened production season.  Since the New
Year, a fair amount of rain has covered most of New Zealand, keeping a
majority of pastures in good condition.  The focus continues to be on powder
production with some producers seeing the combined margins for butter and
skim milk powder equaling or surpassing those of whole milk powder.  Market
activity and trading has increased following the yearend holidays with good
interest coming from China and Southeast Asia.  Most dairy product
manufacturers are attempting to build inventories of dairy products to cover
needs over the carryover period, which is typically June, July and August.
At the January 7 GDT event #107, average prices ranged from 3.4% lower to
5.8% 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, $5,538 -1.8%; butter, $4,223 +5.1%; buttermilk powder,
$4,539 +0.5%; cheddar cheese, $4,656 +1.9%; lactose, $1,826 +5.8; milk
protein concentrate, $9,010 +5.2%; rennet casein, $11,903 +1.1%; skim milk
powder, $4,688 -3.4%; and whole milk powder, $4,934 -0.6%.
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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STAT News Service