News Oceania n°26/2014

Period: December 8 – 19, 2014

AUSTRALIA

• Milk production: is trending lower, but remains above year ago levels.
• Weather situation: below average rainfall over most of the country, in combination with increasing temperatures, is beginning to pressure dairy producers to start or increase supplemental feeding.
• Milk producers: hay harvesting is near completion in most areas, with better quality but lower volumes. Producers in the dry areas of Victoria have begun feeding their 2014 silage, earlier than usual.

NEW ZEALAND

• Milk production: remains above year ago levels, but the increases over last year’s levels are declining.
• Milk producers: lower export prices for milk powders have led to significantly lower farmgate prices compared to a year ago. It is likely that supplemental feeding will be reduced or eliminated and the milk production season will be shortened as cows are dried off more quickly than last year.

MILK PRODUCTION

• New Zealand *: +4,91% (Jun-Oct 14 vs. Jun-Oct 13)
• Australia *: +3,55% (Jul-Nov 14 vs. Jul-Nov 13)

BUTTER (82%): prices improved; production is active as global demand for fat is stronger than for protein; export demand is fairly good from Southeast Asia and the Middle East, and some exports have also gone to Russia; Australian production is focused on domestic needs prior to the year-end holidays.

CHEDDAR CHEESE: prices decreased on the upper end of the range; returns are fairly good compared to other dairy commodities, so additional milk flows are being channeled to cheddar production; buyers are aware there is plenty of competition on the international market and are negotiating lower prices; export demand is best coming from Japan and Korea; Australian production and supplies are focused on domestic needs.

SMP: prices unchanged; production is active and supplies are building, though not described as burdensome; export demand has been fairly steady; the market has a bearish undertone due to the readily available international supplies and prices nearing intervention levels in Europe.

WMP: prices increased marginally on the low end of the range; WMP is still bringing lower returns compared to butter, SMP and cheddar; demand from China continues to be lackluster and below year ago levels; exports into Northern Africa have been fairly good and have eased some concerns regarding burdensome inventory supplies to date.

The recently concluded Korea-Australia Free Trade Agreement may boost Australian exports in the near future, due to an early introduction of reduced tariffs.

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 – SMP Prices in Germany, United States and Oceania