MD_DA120
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MD DA120 OCEANIA DAIRY MARKET OVERVIEW

MADISON, WI.  November 12, 2009 (REPORT 45)

OCEANIA OVERVIEW:  

Milk production in the Oceania region is at seasonal peak levels. 
In New Zealand, milk output is running about 0.6% ahead of last 
year at this time, but not as positive as forecast.  Milk output 
is Australia is at seasonal high levels, although occurring later 
and lower than last year.  In both countries, milk volumes are 
fluctuating lower than recovering to previous levels which is 
typical for this time of the season.  Most milk producers and 
handlers are hopeful that milk volumes will remain at these 
levels for a good period of time.  Water allocations in Northern 
Victoria are running about 40% of total allocations and farmers 
are very pleased, especially when compared to last year when 
allocations were very minimal.  Manufacturing facilities are 
running at full schedules in both countries with some operations 
already being able to adjust the milk flow towards products of 
most need or best return.  At one facility, casein output is 
reported to have ceased.  Generation of manufactured dairy 
product stocks is strong, although manufacturers and handlers 
state that minimal volumes, if any, are uncommitted.  In some 
instances, suppliers are looking to other international sources 
to secure additional volumes of stock to fulfill previously made 
commitments.  Demand for anhydrous milk fat is strong, thus 
butterfat available for butter production is often shorted.  At 
the November 3 global/Dairy Trade event for whole milk powder, 
the average price was $3,437 per MT, 13.7% higher than the 
previous month's average.  This average is above year 
comparables.  Near term shipments (January 2010) averaged $3,352 
per MT, 11% higher than the previous event,  February - April 
shipments averaged $3,393 (12.8% higher) and May - July shipments 
averaged $3,684, (20.7% higher).  Anhydrous milk fat traded for 
the first time during the November trading event and averaged 
$4,757 per MT.  Near term (January) shipments averaged $4,809 per 
MT, February - April averaged $4,728, and May - July shipments 
averaged $4,735.

0930c steve Schneeberger  (608)250-3204