Oceania Dairy Market Overview

MADISON - Apr 29/10 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The Oceania milk production season
continues to wind down.  Concern remains over whether or not
there will be an adequate supply of some manufactured products
this season to fulfill commitments, particularly whole milk
and butter/amf.  The current milk production projection for
New Zealand has volumes for the current season unchanged to
just slightly above the previous season.  Some milk is being
shifted from cheese to butter/skim or whole milk production to
better cover commitments and/or additional demand.  Many herds
have been dried off early due to the drought in parts of the
North Island.  The drought continues over the North Island of
New Zealand, though rain is expected soon.  In the southern
part of the South Island, some flooding has been occurring.
Many herds have been or are also being dried off for winter.
Supplies of finished products are mainly committed and the
forecast is not to have much extra product available until
very late in the year.  Fonterra just announced an increase of
40 cents to $6.10 per Kg of milk solids.  This is the first
forecast price increase since last November.  In Australia,
the late season continues to run strong with the seasonal milk
production total still below last year; though the gap is
narrowing due to the better weather and pastures for milk
production.  Overall, fat supplies are tight and there is a
strong demand for both amf and butter.  Concern over
butter/amf availability may last as reports indicate supplies
elsewhere in the world may also be limited.  Many customers
are skeptical about the recent skim powder prices on the
Global Trading Platform and are reluctant to make purchases at
current prices, assuming prices may decline next month.
Supplies of skim are available from other sources, including
the U.S.  Cheese prices have firmed slightly as some milk
supplies have shifted to butter and/or whole milk.  Rain in
Australia has aided in keeping late season pastures and added
volumes to depleted reservoirs though overall levels remain
low.  Improved milk prices for producers, combined with lower
grain prices, makes supplement feeding more effective.  The
recent announcement that China will not take additional U.S.
sourced product due to a disease concern may shift some demand
to other countries after the May 1 deadline.


0930c (608)250-3204  George Koerner 608-250-3205

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STAT News Service

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