Significant Butter demand for near term delivery [News Oceania n°5/2018]

Period: February 19 – March 2, 2018

New Zealand milk production in the period June 2017 – January 2018 is unchanged, but seasonal production is expected to be about 1.5% below last season.

January 2018 milk production was 4.9% lower from one year ago.

Australia milk production in the period July 2017 – January 2018 increased by 3.09% in comparison with last season.

Increases are attributed to improved weather in most dairy regions as well as incrementally higher milk pay prices. Lower than projected New Zealand milk production, coupled with good product demand from other countries, has helped strengthen dairy commodity prices. Recent plans for investment in Australian dairy processing are encouraging to many producers.

Last week some Buyers of Butter sought to close deals for near term delivery, which was an important factor moving prices higher. Oceania WMP prices slightly firmed and much of seasonal production is already contracted.

After recent price strength, SMP prices declined, affected also by pressure from global stocks.

Global pressure on cheese prices drove weaker Cheddar prices in Oceania.

In 2017, New Zealand increased Cream exports by 48.9%. January 2018 figures show a further increase of 23.6% compared to January 2017. More than half is exported to China.