New Zealand farmers are culling low producing cows [News Oceania n°18/2015]

Period: August 31 – September 4, 2015

AUSTRALIA

• Milk production: in July was up 5.36% from July 2014.
• Weather situation: favorable over most of Australia, with some regions seeing drought like conditions. However, this doesn’t seem to be affecting production.

NEW ZEALAND

• Milk production: is up slightly year to date. Production is expected to trend back in line with last year over the course of September.
• Weather situation: has been generally cold and wet, which is not conducive to good grass growth.
• Milk producers: the historically low farm level prices have many farmers in New Zealand culling low producing cows. Farmers do not feel that they can sustain at current pricing levels.

MILK PRODUCTION

• Australia *: +5.36% (Jul 15 vs. Jul 14)
• New Zealand *: +11.48% (Jun-Jul 15 vs. Jun-Jul 14)

BUTTER (82%): prices are steady to higher. Production is increasing as producers prefer to make butter and skim milk powder instead of other commodities. Export demand is steady to increasing, but some manufacturers are short on supplies for exports. Russian embargos have been lifted for some exporters. The high U.S. butter prices have also led to lower U.S. export sales, which allows the rest of the world to compete for those sales.

CHEDDAR CHEESE: prices are mixed in a quiet market. Production is steady as most producers are getting a good return. Export demand is stable to increasing, especially into the U.S.

SMP: prices are higher. Manufacturers feel that prices are in line with U.S. prices, but below Europe on the global market. Production is up as more producers are pushing milk volumes into butter and skim milk production. Some manufacturers report higher than desired stock levels.

WMP: prices moved higher. Whole milk powder production is down as manufacturers are choosing to make cheese or butter and SMP instead, due to better returns.

In Oceania prices of dairy commodities increased.

The low farm level prices have many farmers in New Zealand culling low producing cows.

CLAL.it – SMP prices in Oceania, United States and Germany

Note: · 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

More informations about milk production in New Zealand and Australia are available on CLAL.it