MD_DA120
DA
MD DA120 OCEANIA DAIRY MARKET OVERVIEW

MADISON, WI.  February 4, 2010 (REPORT 05)

OCEANIA OVERVIEW:  

      Oceania milk production continues to decline seasonally.  
In New Zealand, rainfall has been reported in areas needing 
moisture, but milk producers and handlers indicate that 
additional volumes are needed to re-establish good pasture 
growth.  Milk handlers state that milk production projections 
for the year continue to be adjusted and the recent most 
estimate is that output will be basically flat with last year, 
but many indicate that there are still a number of months left 
to the current season that could swing production volumes one 
way or the other.  In Australia, milk production continues to 
trail last year comparables.  The official November figures 
indicated that output was down 6.8% when compared to last 
November and December projections are that output will 
continue on a negative path.  Preliminary figures are for a 9% 
decline over last December with a cumulative, 6 months (July - 
December) year to date figure to be around 6% lower.  Milk 
producers and handlers state that it will take a number of 
consecutive positive years to regain a portion of what has 
been lost over the past 6 - 7 years.  Traders and handlers 
state that manufactured dairy product prices are trending 
lower.  Lower prices are not being influenced by 
supply/demand, but rather lower prices in other international 
markets.  Although milk volumes are trailing last season, 
stocks of manufactured dairy products are in close balance to 
tight.  Suppliers indicate that demand for butterfat remains 
strong and supplies are tight.  At the February 2 global/Dairy 
Trading event, whole milk powder prices averaged $3,256 per MT 
ton, down 1.6% from the previous event.  Near term (April) 
deliveries averaged $3,175, 2.5% lower than the last event; 
May - July deliveries averaged $3,280 (+1.6); and Aug - Oct 
deliveries averaged $3,240 (-6.7%).  Again, only New Zealand 
sourced whole milk powder was available.  Also at the trading 
event, anhydrous milk fat averaged $4,183 per MT, down 7.9% 
from the previous event.  April deliveries averaged $4,130 (-
7.8%); May - July deliveries averaged $4,175 (-6.8%); and 
August - October deliveries averaged $4,145 (-11.7).  During 
the next trading event on March 2, skim milk powder will be 
auctioned for the first time.  Traders and handlers are 
already trying to speculate where these sales will settle. 
      0930c steve Schneeberger  (608)250-3204