NEWS from OCEANIA: dairy market n° 23/2013
(25 November - 6 December 2013) source: USDA
Milk production in AUSTRALIA declines compared to last season. The peak in October, in fact, was significantly below last year's levels. Projections for 2013/2014 season have been revised at 0-2.2% below the previous season. Declines in production are partly due to adverse weather conditions where limited rains have reduced pasture and crop growth. Another factor has been that many producers were rebuilding their financial underpinnings and were adverse to a dairy expansion because of the increased risk and debt.
NEW ZEALAND milk production continues to be robust and above year ago levels thanks to favorable weather patterns. Production estimates for October are nearly 5% above the previous year's pace.
- New Zealand *: +6,86% % (Jun - Sep 13 vs. Jun - Sep 12)
- Australia *: -4,13 % (Jul - Oct 13 vs. Jul - Oct 12)
BUTTER (82%): mostly steady prices; the high range reflects prices for exports to Russia, while the lower end the domestic sales; limited butter availability with nearly all supplies committed; low production also due to reduced cream availability in New Zealand as whole milk powder production has increased; higher interest from Southeast Asia in the AMF market where margins are often higher than butter 82%.
CHEDDAR CHEESE: higher prices; low production with margins favoring WMP production; limited supplies available for spot sales; negotiations are ongoing with Japan for Q1 and Q2 supplies.
SMP: increased market activity and higher prices as in part a result of the disappearance of discounts on US sourced product; low production; tight supplies with nearly all supplies committed through Q1 of 2014; negotiations are ongoing for Q2 of 2014.
WMP: higher prices; improved demand particularly from China and Southeast Asia; active production as more milk is processed into WMP, because of the higher margins.
Whole milk powder continues to provide the greatest return and also the export demand, also for the SMP, continues to be very good with good buying interest coming from China and Southeast Asia.
Some buyers are realizing that prices will not decline significantly in the near term so they have to accept to make purchases at current price levels.
Note: · Assessments about market trend are expressed in US$;
· * Dairy season: July, 1st - June, 30th (Australia), June, 1st - May, 31st (New Zealand)