News Oceania n°21/2014

Period: September 29 – October 10, 2014

AUSTRALIA

• Milk production: is building towards the seasonal peak. Production through September has seen increases over year ago levels.
• Weather situation: dry conditions in some areas. Weather concerns have caused some cooperatives to lower their milk production estimates for this season.
• Milk producers: some producers have increased feedings of silage and grain to increase milk production ahead of the drier months (December, January and February).

NEW ZEALAND

• Milk production: is expanding towards the seasonal peak and above year ago levels.
• Weather situation: typical spring weather with plenty of rain.
• Milk producers: some cooperatives have reduced farmgate prices. Some producers have responded by taking steps to increase production, via supplemental feeding, in order to sustain a comparable cash flow.

MILK PRODUCTION

• New Zealand *: +7,82% (Jun-Jul 14 vs. Jun-Jul 13)
• Australia *: +1,94%  (Jul-Aug 14 vs. Jul-Aug 13)

BUTTER (82%): prices declined significantly; production is increasing, due to the expansion in milk production; the good domestic demand in Australia reduces the volumes available for export; export demand is fair with numerous buyers looking for long term agreements, while sellers are cautious; AMF production is increasing with expanded exports to the US; August Butter and AMF imports leveled off, but remain above year ago levels.

CHEDDAR CHEESE: prices held steady; good domestic demand is keeping the increasing supplies balanced; cheese makers want to expand their inventories; export demand is active and predominately from Japan and other Asian countries; expectations for upcoming negotiations with Japan are less optimistic, due to the current global milk and cheese supplies.

SMP: prices declined on the upper end of the range; milk flows to SMP dryers are increasing, due to increases in milk production, but also due to milk flow diversions away from WMP production; the current low price is prompting some buyers to lock in prices well into 2015, while sellers are hesitant to make long term commitments beyond Q1, thinking there is more upside to the market in the long run; export demand is good.

WMP: prices declined; export interest for WMP continues to be weak; whenever possible, manufacturers are channeling milk flows away from WMP and into Butter and SMP production.

In August Oceania’s exports of Butter, Cheese, SMP and WMP to China decreased compared to July, but remained above year ago levels (except for Butter, whose exports are almost unchanged compared to August 2013). Exports to China for the January-August 2014 period are well above 2013 levels.

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 – interactive Payout SMP + Butter