Milk production on the rise [News Oceania n°15/2018]

Period: July 9 – 20, 2018

Winter planting is nearly complete in Australia. Many areas in the West have received good rainfall, supporting the crops growth. It remains uncertain what will result in currently drier central regions.

Dairy Producers with fewer than 300 cow herds (about one half of Australian Dairy Producers) are advocating to receive higher milk pay prices and are asking Fonterra for a more equitable pay system.

The new dairy season in New Zealand started positively, marking +11.2% in June 2018 compared to June 2017. However, this is the month in which milk production is at the lowest seasonal levels.

In New Zealand there are some tensions related to the expansion of dairy farms, which involves land more in need of irrigation, and animal welfare.

Butter prices in Oceania are weaker. Buyers expect increasing butter supplies as the season picks up. Most butter shipments are made from stock held as inventory, not from current production.

Prices are weaker also for WMP. Particularly at this time of year, most price signals in Oceania respond to GDT events more than market spot sales.

SMP prices in Oceania are slightly higher. Negotiations for new season production have led to contracting at a good pace, in the view of a few manufacturers.

Cheddar prices in Oceania are weaker, impacted by little current activity. Buyers are expecting good volumes of cheese as milk supplies seasonally increase. Many plants have recently completed scheduled maintenance or will soon complete it.