Oceania: milk producers have their eyes on weather [News Oceania n°19/2015]

Period: August 31 – September 4, 2015

AUSTRALIA

• Milk production: is up from year ago levels.
• Weather situation: has been fairly dry lately after a cool, dry winter.
• Milk producers: are hoping for favorable weather as spring approaches. With the low farm level prices, farmers are in need of optimal grass growth, but the cold wet weather has been adverse.

NEW ZEALAND

• Milk production: forecast is lower (-5%), which is pushing up the market for dairy commodities.
• Weather situation: has affected cow comfort. Some areas were recently hit with heavy rain. In parts of Gisborne there is risk of livestock contamination from farm run-off following recent floods.
• Milk producers: cow culling is increasing but has not affected production rates. Early calving seems to be aiding in this.

MILK PRODUCTION

• Australia *: +5.36% (Jul 15 vs. Jul 14)
• New Zealand *: +1.57% (Jun-Aug 15 vs. Jun-Aug 14)

BUTTER (82%): prices are moving higher. Manufacturers are still favoring production of butter and SMP instead of other commodities. However milk intakes and components are lower, and butter production is down. Some manufacturers are reporting tight inventory levels as the holiday season approaches. Export demand is strong as prices are below U.S. level.

CHEDDAR CHEESE: prices are steady. Production is active in New Zealand at current prices. Manufacturers in Australia feel that they are not competitive in the global market at current pricing levels.

SMP: prices increased. Some producers are reducing production in order to decrease stocks. Sources suggest demand is decreasing due to the increase in prices. Many end users are covered for current and future needs through 2015.

WMP: prices increased. Production fills current orders only. Some producers in Australia report current export demand is low, while New Zealand export demand is steady to higher. Australian WMP exports dropped in July and remain below year ago levels, mainly due to lower demand from China.

Oceania milk producers have their eyes on climate change:

• in Australia they’re in need of favorable weather for optimal grass growth, while
• some areas of New Zealand were hit with heavy rain, with a consequent risk of livestock contamination from farm run-off following floods.

CLAL.it – GlobalDairyTrade: average price changes

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

More informations about milk production in New Zealand and Australia are available on CLAL.it