Oceania Dairy Market Overview

MADISON - Mar 13/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
AUSTRALIAN milk production is generally stable with recent
weeks.  Weather conditions are tracking at dryer than normal
patterns across much of the dairy regions.  Supplemental
watering and irrigation are being utilized to compensate for
rainfall shortages and to keep pastures and crops in decent
shape.  The impact of high milk prices is aiding dairy farmers
by offsetting input costs.  A trade source is noting the record
difference between Australian and New Zealand milk prices.
According to Dairy Australia, January 2014 milk production in
Australia was 3.1% above January 2013.  The state changes from a
year earlier are:  New South Wales, -3.0%; Victoria, +4.8%;
Queensland, -4.2%; South Australia, -6.2%; Western Australia, -
3.6% and Tasmania +9.7%.  Australia's milk production season to
date is -2.2%, compared to last season.  Dairy Australia states
exports for the July-January period total 425.4 thousand tons,
down 9.6% from the year ago period.  The largest export
categories are skim milk powders (SMP) and whole milk powders
(WMP).  The total value of export is 19.6% higher over the prior
year period.  The highest value items are WMP and SMP.
NEW ZEALAND Milk production trends remain well above year ago
marks and are indicated to be tracking nearly 5% higher for the
season through February.  February trade indications are
tracking 10.6% higher than during the same month in 2013.
Another seasonal forecast by a financial institution is
projecting a 10% increase.  Production is being tempered by dry
conditions on the North Island.  Higher pay prices for milk are
providing an incentive for farmers to keep cows in the string
longer.  The forecasted milk price for the current season was
increased by 35 cents to NZ$8.65/kilogram of milk solids, a new
record high price.  The higher price is a result of sustained
high commodity pricing and good demand for milk powders from
global accounts, most notably from China.  Areas of Waikato and
other parts of the North Island are indicated to be in drought
like conditions, even though there is no official drought
declaration.  News reports are that some dairy farmers dried off
herds due to dry conditions of pastures.  Yet other farmers are
utilizing the higher milk prices to offset higher production
costs of buying supplemental feed.  Additionally, feed, hay, and
silage supplies are in greater supply than a year ago.  Holdings
of dairy products are trending lower seasonally as the milk
production season winds down and the product mix is shifted to
products of greatest needs and those needed to maintain
carryover stocks.  Demand remains fair to good across product
categories.
At the March 4 GDT event #111, average prices ranged from 5.8%
lower to 3.9% higher from the prior event across categories. The
all contracts price averages (US$ per MT) and percent changes
from the previous average are:  anhydrous milk fat, $5,126 -
3.5%; butter, $4,746 +3.9%; buttermilk powder, $4,792 -5.8%;
cheddar cheese, $4,837 +0.7%; lactose, not sold; milk protein
concentrate, $8,524 -3.3%; rennet casein, $11,791 +2.9%; skim
milk powder, $4,658 -3.9%; and whole milk powder, $4,703 -5.7%.
0930C butch.speth@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