MD_DA120
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MD DA120 OCEANIA DAIRY MARKET OVERVIEW

MADISON, WI.  February 2, 2012 (REPORT 05)

OCEANIA OVERVIEW:  

The Oceania milk production season continues to trend lower, although 
not at an accelerated pace.  Milk producers and handlers in both 
Australia and New Zealand indicate that milk volumes are maintaining 
levels on the downside of production that are welcomed.  In New 
Zealand, weather patterns are quite favorable for good milk production 
at this time of the annual production cycle.  Milk handlers continue 
to project a 3 - 4% annual increase over last season, with some milk 
handlers now adjusting their estimates to a strong 4% plus increase.  
In Australia, fluctuating weather patterns are not having an overall 
negative impact on milk output.  Milk producers and handlers are 
indicating that milk volumes are lower, but maintaining levels that 
are often higher than projected.  In recent weeks, short periods of 
hot temperatures are eased by cooler temperatures and period of 
moisture are followed by sunny days, which is having minimal negative 
impact on overall milk production on the downside of the season.  The 
Gippsland region of Victoria continues to struggle with very wet 
conditions which are limiting milk output this season.  Through 
December, cumulative milk production in Australia, for the first half 
of the fiscal year is running 3 1/2% ahead of the previous year.  
Australian producers continue to project a 2 - 3% annual increase when 
the current fiscal year ends in June.  Current favorable milk receipts 
are causing some milk handlers to project annual volumes to be at the 
upper end of projections, but they also indicate that a lot of 
negative factors could come into play during the final 6 months of the 
season that could potentially reduce favorable optimism.  
Manufacturers and handlers are indicating that stocks are basically 
fully committed and order books are in a strong position.  During the 
g/DT auction #61 on February 1, all contract average prices were 
lower.  For skim milk powder (U.S. sourced) contract #1 (March), the 
price averaged $3,008 per MT, 0.9% less than the previous auction.  
Contract #2 (April) average prices and changes from the previous 
session are:  anhydrous milk fat, $3,796/MT, -6.4%; no buttermilk 
powder was traded;, skim milk powder, $3,265, -0.6%; whole milk 
powder, $3,495, -0.8%; milk protein concentrate $5,220/MT -9.6%; 
rennet casein $7,728/MT -2.9%; and cheddar $3,578/MT, -2.9%.  

0930c steve Schneeberger  (608)278-4154