Oceania Dairy Market Overview

MADISON - May 22/14 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australian milk production has benefited from a period of unseasonably warm
temperatures with highs near 70 degrees Fahrenheit. The warm weather has
prompted some good pasture growth and allowed milk production to hang on and,
in some areas, marginally increase.  Milk flows are being channeled to
processing plants that are most readily available, as some manufacturers have
shuttered operations for scheduled maintenance projects.  Inventories for
most dairy commodities are at desired levels, prior to the end of the fiscal
year, with some excess supplies being made available to the spot market.  The
forecast for the likelihood of an "El Nino" weather pattern, increasing the
possibility of drought, has raised concerns with some producers and
restricted planned herd expansions.  According to Dairy Australia, April 2014
milk production in Australia was 5.6% above April 2013. The state changes
from a year earlier are: New South Wales, +1.4%; Victoria, +5.8%; Queensland,
-0.6%; South Australia, +1.9%; Western Australia, -0.1% and Tasmania +18.9%.
Australia's milk production season to date (July-April) is -0.8%, compared to
last season.  Dairy Australia also reports exports for the July-March period
totaling 554.2 thousand tons, down 8.5% from the year ago period. The largest
export category is skim milk powders (SMP). The total value of export is
20.2% higher over the prior year period. The highest value items are SMP and
WMP.
NEW ZEALAND milk production continues to decline and wind down seasonally
with more cows being dried off and moved to winter pastures.  Some
manufacturing plants are shutting down operations for yearend maintenance
projects.  Where possible, some producers are extending the milking season,
incentivized by the relatively high milk price and good margins.  Spot sales
are continuing for some commodities, especially milk powders, as
manufacturers adjust inventory levels prior to the end of the fiscal year.
March milk production was reported by DCANZ at 1.76 million tons, up 22.0%
from March 2013 and 1.6% higher than two years ago.  At the May 20 GDT event
#116, average prices ranged from 3.8% lower to 4.6% 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, $4,255
+1.9%; butter, $3,667 -3.8%; buttermilk powder, $3,950 -1.9%; cheddar cheese,
$4,108 -2.1%; lactose, n.a.; milk protein concentrate, n.a.; rennet casein,
$11,861 +4.6%; skim milk powder, $3,733 -3.5%; and whole milk powder, $3,877
-1.1%.
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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STAT News Service