News Oceania n°14/2014

Period: June 23 – July 4, 2014

AUSTRALIA

• Milk production: a 2% growth in Australian milk production is forecast for the 2014/15 season
• Weather situation: mild conditions changed to a more normal pattern with colder, wetter weather covering the major dairy producing regions in southeastern Australia
• Milk producers are no longer trying to extend milk production. Producer margins continue to be supportive of investment and expansion

NEW ZEALAND

• Milk production: current milk production is low with a majority of cows on winter pastures
• Weather situation: weather has turned cold and wet. Recent rains have promoted good pasture growth
• Milk producers: new season farmgate prices are lower than prices paid at the close of last season, but relatively high compared to prices paid at the beginning of previous seasons

MILK PRODUCTION

• New Zealand *: +8,92% (Jun 13 – Apr 14 vs. Jun 12 – Apr 13)
• Australia *: -0,19% (Jul 13 – May 14 vs. Jul 12 – May 13)

BUTTER (82%): prices declined on the low end of the range; Russia is negotiating for Q4 supplies with some sales at the upper end of the range; Ramadan causes a decline in export interest from some Southeast Asian countries and the Middle East; Q3 stocks are mostly committed.

CHEDDAR CHEESE: prices moved lower on the upper end of the range and reflect the recent agreements reached during the Japan negotiations; inventories are tight; production is expected to increase in the coming weeks as cheese is providing a higher return than whole milk powder.

SMP: prices were unchanged and remain competitive with other global markets; market activity is focused on immediate Q3 needs; China SMP imports in May were down from the previous month with less product coming from the U.S., New Zealand and Australia, while the European share increased.

WMP: prices moved significantly lower; China’s May WMP imports decreased, compared to April, and many market participants are awaiting China’s return to active trading.

Australia and New Zealand, which are among the leading suppliers of China, were affected by the lower imports in May compared to April.
Productions of skim milk powder, butter, and AMF in New Zealand are expected to increase, as a cooperative is shifting production away from whole milk powder for the next few months. Some market analysts see the move as an attempt to offer more SMP to the Asian market and more butter to the U.S. market.

Note: · Assessments about market trend are expressed in US$;
· * Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand).

Source: USDA summarized by the CLAL Team

CLAL.it – China: monthly import of SMP