Period: October 2 – 27, 2017
Australian milk production Jul-Sep 2017 increased by +1.01% y-o-y. Even if some regions will be facing poor weather, the overall milk production in Australia is expected to increase of about +2% to +3% in the current producing season. However, sustained retail driven discounting of block cheese could feed back to dampen commodity returns and impact milk pay prices.
New Zealand
-1.6% milk production
Sept 2017 y-o-y
Many dairy producers in New Zealand are hoping for some dry days to ease the standing water in pastures. Milk production in September was -1.6% below September 2016.
There is uncertainty about plans of the new government of New Zealand to alter environmental regulations affecting irrigation and water use. Some options under discussion could lead to less ability to irrigate farmland or use water for cows.
Butter prices in Oceania declined, but the magnitude of declines was lower than in the EU. A factor moderating the decline is a perception that butter stocks are a bit tighter than is desirable.
Cheddar prices are steady, supported by the good balance between production, exports and stocks. Prices are expected to remain steady in the coming weeks.
SMP prices weakened, settling slightly above EU prices.
When WMP prices drop below $3,000/MT, it is of great concern in the New Zealand dairy industry.
WMP prices weakened: the low end of the price range fell below $3,000/MT. When WMP prices drop below this value, it is of great concern in the New Zealand dairy industry, because WMP production is taking more New Zealand milk than other dairy products. There is uncertainty as to the persistence of weakness in WMP prices, since the recent projections for a lower milk production in New Zealand had been expected to boost WMP prices. It is possible that buyers remain confident they can secure WMP in coming months, and that, coupled with more WMP being offered at the October 17 GDT than had previously been announced, may have weakened prices.
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CLAL.it – Milk Prices in Oceania, United States and the EU
– Dairy season: July, 1st – June, 30th (Australia), June, 1st – May, 31st (New Zealand);
– Source: USDA summarized by the CLAL Team
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The CLAL.it team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.
