Oceania: demand for SMP and WMP is flat [News Oceania n°10/2015]

Period: May 4 – 15, 2015

AUSTRALIA

• Milk production: in recent weeks has seen a marginal increase as autumn calving has added cows to the milking herd.
• Weather situation: the first significant cold spell has covered most of the major dairy producing regions.
• Milk producers: hay trading has increased with the onset of cooler weather and as the irrigation season draws to a close. Overall, supplies have been adequate to meet demand.

NEW ZEALAND

• Milk production: continues to decline as it moves towards the seasonal low point. Current estimates are calling for a 1.5% increase over last season.
• Milk producers: some cooperatives have again reduced their farmgate prices, which will likely hasten producers to dry off cows and move them to winter pastures.

MILK PRODUCTION

• New Zealand *: +2.18% (Jun 14-Mar 15 vs. Jun 13-Mar 14)
• Australia *: +2.94% (Jul 14-Mar 15 vs. Jul 13-Mar 14)

BUTTER (82%): prices moved only marginally lower on the low end of the range; available supplies for export have tightened as milk production has moved lower; demand is good in Australia, which is contributing to the tight supply situation; export demand remains fairly steady with good interest coming from Asia and the United States.

CHEDDAR CHEESE: prices held steady; production is trending lower, following the seasonal decline in milk production; good domestic demand in Australia is restricting available volumes for export; current export demand is holding fairly steady; the market has a weak undertone, due to increasing available supplies and competition from Europe and the United States.

SMP: prices moved lower; supplies are readily available in the region; some manufacturers have decided to carry their inventories into the new fiscal year rather than sell at current price levels; the market’s undertone is weak, partially due to expanding competition and increased offerings from the northern hemisphere.

WMP: prices moved significantly lower on the upper end of the range; supplies for export are readily available in New Zealand, but limited in Australia; efforts to reduce supplies to appropriate levels prior to the end of the fiscal year are prompting some manufacturers to provide additional discounts.

Demand for SMP and WMP is flat as many buyers have covered their near term needs over the past number of weeks.

New Zealand’s January to March Butter exports fall 7.2% y-o-y. Cheese and SMP exports increased by 21.9% and 36.4% respectively on the same period.

CLAL.it – GlobalDairyTrade Auction

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