Period: October 1 – 12, 2018
Australia
-3.6% milk production August 2018 y-o-y
Milk Producers, faced with higher prices for feed and less water availability, are reducing the herd sizes by 25% (the typical annual culling involved about 20% of herd sizes).
New Zealand continues to benefit from nearly ideal conditions for milk production, which in the first quarter of the 2018-19 production season is 5.5% higher than the same period of the previous season.
Fonterra increased its forecast New Zealand milk collection volumes by 1.3% to 1,550 million kgMS and revised its 2018/19 forecast Farmgate Milk Price from 6.75 NZD/kgMS to a range of 6.25-6.50 NZD/kgMS
Lower prices for the dairy products
This is especially true for WMP, which is the most important New Zealand dairy product exported in terms of dollar value. With exports remaining generally steady, some WMP plants are comfortable to slightly back off and let more milk flow to other uses, often Cheese and Butter plants. The lower prices have led to more recent interest from Buyers such as China in contracting for future deliveries.
Oceania Cheddar prices are slightly down. Production is increasing, made possible by increasing milk volumes now being available to cheese plants.
Buyers are contracting to lock in current Butter pricing
The SMP market is also down. It is still early in the season and there is plenty of SMP available for interested Buyers. Contracting is moving but not with any real sense of urgency among Buyers.
– 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