Oceania Dairy Market Overview

MADISON - Jul 9/15 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:
Australia's milk production season concluded at the end of June. Milk
production for the season was above the previous year with estimates of a 2-
3% increase. Recently announced opening milk prices for the new season are at
or near AUD5.60 per kg milk solids. Price step ups are expected with a
forecast of AUD6.05 by season's end. Australia's dairy industry continues to
see significant investments into expanding dairy operations and enhancing
manufacturing capabilities and capacities to meet various dairy product
demands coming from Asia. The Australian hay market has a firm undertone.
Stocks are seasonally low and rainfall over much of the dairy producing
region has been below average. Concerns are increasing over the possibility
of lower hay yields in the upcoming harvest. Some buyers are in negotiations
for additional supplies.
Dairy Australia reports that May 2015 milk production in Australia was 1.1%
above May 2014. The state changes from one year earlier are: New South Wales,
+4.1%; Victoria, -0.3%; Queensland, -11.3%; South Australia, +1.6%; Western
Australia, +15.4%; and Tasmania, +7.9%. Australia's milk production season to
date (July-May) is +2.8%, compared to last season.
Dairy Australia reports dairy product exports for the July-May period
totaling 683.3 thousand MT, up 2.4% from the year ago period. Selected dairy
product export changes compared to the same period last year are: butter, -
22.3%; butter oil, -0.1%; cheddar, -12.2%; SMP, +28.8%; WMP, -29.0% and whey
products +3.1%.
New Zealand's milk production is at seasonally low levels as most dairy cows
are dried off and on winter pastures. Calving will begin in another week or
so and milk production will start to increase. Weather forecasters are
calling for cold temperatures with rain or snow in most areas of the country
for the coming week. Pastures and forages are in normal to good condition for
this time of year. Dairy manufacturers are attempting to reduce their
remaining stocks of dairy commodities by the end of July with mixed results.
Supplies are currently available for nearly all dairy commodities and will
likely increase as the new season begins in August. Manufacturers are focused
on locking in sales for Q3, Q4 and beyond. Demand is sluggish as many buyers
have more than adequate supplies. Numerous market analysts expect the bearish
market conditions to continue through 2015 and into 2016.
New Zealand's May milk production, as reported by DCANZ, was 0.796 million
MT, up 10.7% from May 2014 and 37.2% higher from two years ago. May milk
solids reflect a 11.7% increase compared with May 2014.
At the July 1 GDT event #143, average prices ranged from 10.8% lower to 1.6%
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, $2,855 +1.6%; butter, $2,694 -0.3%; buttermilk powder,
$1,878 -8.1%; cheddar cheese, $3,060 -4.9%; lactose, n.a; rennet casein,
$5,901 -4.1%; skim milk powder, $1,875 -5.8%; sweet whey powder, n.a.; and
whole milk powder, $2,054 -10.8%.
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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