The two most recent overviews are available here:
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 29, 2010 (REPORT 17)
OCEANIA OVERVIEW: The Oceania milk production season continues to wind down. Concern remains over whether or not there will be an adequate supply of some manufactured products this season to fulfill commitments, particularly whole milk and butter/amf. The current milk production projection for New Zealand has volumes for the current season unchanged to just slightly above the previous season. Some milk is being shifted from cheese to butter/skim or whole milk production to better cover commitments and/or additional demand.
Many herds have been dried off early due to the drought in parts of the North Island. The drought continues over the North Island of New Zealand, though rain is expected soon. In the southern part of the South Island, some flooding has been occurring. Many herds have been or are also being dried off for winter. Supplies of finished products are mainly committed and the forecast is not to have much extra product available until very late in the year.
Fonterra just announced an increase of 40 cents to $6.10 per Kg of milk solids. This is the first forecast price increase since last November.
In Australia, the late season continues to run strong with the seasonal milk production total still below last year; though the gap is narrowing due to the better weather and pastures for milk production. Overall, fat supplies are tight and there is a strong demand for both amf and butter. Concern over butter/amf availability may last as reports indicate supplies elsewhere in the world may also be limited.
Many customers are skeptical about the recent skim powder prices on the Global Trading Platform and are reluctant to make purchases at current prices, assuming prices may decline next month. Supplies of skim are available from other sources, including the U.S. Cheese prices have firmed slightly as some milk supplies have shifted to butter and/or whole milk.
Rain in Australia has aided in keeping late season pastures and added volumes to depleted reservoirs though overall levels remain low. Improved milk prices for producers, combined with lower grain prices, makes supplement feeding more effective. The recent announcement that China will not take additional U.S. sourced product due to a disease concern may shift some demand to other countries after the May 1 deadline.
0930c (608)250-3204 George Koerner 608-250-3205
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 29, 2010 (REPORT 17)
WESTERN OVERVIEW: Milk production is growing seasonally in Western Europe. Weather conditions in Europe have turned more seasonal. Emphasis on current fluid intakes centers on cheese production and other products for internal EU consumption.
International interest in cheese from Russia and parts of Eastern Europe continues to help in directing milk production toward cheese production rather than other export products. Butter supplies are tight and butteroil prices reported are nominal due to the supply. Demand is strong for butter with PSA butter stocks lower than in comparable periods in recent years. Buyers were also aggressive with whole milk and whey.
Interest in skim milk is spotty and quieter than most other products. Thus far in 2010, slightly over 20,300 tons of butter are in PSA storage compared to just over 72,300 tons last year and 35,000 tons in 2008. Weather is turning more seasonal and milk volumes are expanding after a slow early part of the calendar year. February and March milk receipts in the EU were just slightly below year ago levels.
The European Food Safety Authority has issued scientific advice that the short term risk following the Iceland volcano eruption, the potential risk caused by fluoride in volcanic ash through the contamination of drinking water, feed and foods is negligible in the EU. The announcement by China that they will stop importing U.S. originated product due to a health certificate issue may allow other countries an export opportunity, assuming the May 1 deadline stands.
EASTERN OVERVIEW: Milk production is increasing in Eastern Europe though still lagging somewhat as temperatures and pasture conditions are becoming more favorable. Manufacturing of export products thus far is minimal as most current milk receipts are mainly for internal use products.
0930c George Koerner (608)250-3205
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 15, 2010 (REPORT 15)
OCEANIA OVERVIEW: The Oceania milk production season continues to wind down at varying rates. In New Zealand, the end of the milk production season has quickly deteriorated and most manufacturers and handlers are very concerned about fulfilling end of season commitments. Lack of late season moisture on the North Island is the major factor contributing to the downturn in milk output. On the North Island, milk output is down as much 30 - 40% when compared to last year at this time. Milk handlers are stating that this drop off is 4 - 6 weeks earlier than usual. On the South Island, conditions are not as bad although this region is not the significant milk producing region of New Zealand. Output continues to run ahead of last year in the Central part of the island but is starting to trail last season in lower regions of the South Island. With this sharp decline in late season production, milk handlers are now hopeful that annual milk output will hold at levels of last year and not fall below. More farmers are adjusting their milking schedules to once a day and they are drying off their herds earlier than usual. They indicate that this will reduce their cash flow, but feel that this is better than trying to maintain production under adverse conditions.
In Australia, the milk production season continues to wind down, but reports indicate that the end of the season is still favorable. Although milk production, on an annual basis, is down 6.4% for eight months (July - February), some milk handlers continue to project annual output to be about 4% lower than last season. Others state that with only four months left of the season, significant milk output will be needed and many are doubtful that a 2+ percent gain, to get it up to a negative 4% annual decline, can be realized at this time of the production cycle. As milk volumes decline at varying rates, manufactured dairy product handlers are very concerned about meeting end of season commitments. Many suppliers are reviewing existing supply commitments that have yet to be contracted to identify possible milk reallocation options.
At the April 6th golbal/Dairy Trading event, average milk powder and anhydrous milk fat prices increased over 20%. For anhydrous milk fat, the average price for the three shipment periods was $4,837 per MT, up 21.9% from the previous month. Near term shipments (June) averaged $4,976 (+24.2%); Jul - Sept shipments averaged $4,854 (+22.1%); and for Oct - Dec averaged $4,691 (+20.8%). For skim milk powder, the average price was $3,672 per MT (+25.5%). Near term shipments averaged $3,847 (+36.2%); Jul - Sep, $3,964 (+26.1%); and Oct - Dec, $3,421 (+16.9%). Whole milk powder averaged $3,969 per MT (+21.0%). Near term shipments averaged $4,092 (+24.3%); Jul - Sep, $4,061 (+21.7%); and Oct - Dec, $3,773, (+17.8%).
Traders and handlers were anticipating firmer prices at the most recent trading event, but were surprised at the sharp increase realized. Many are now analyzing what affect these prices are having on current and future prices. Many indicate that they are firming their prices, but generally not to levels of the trading event. Most speculate that these sharp increases will not be sustained and anticipate lower prices within the month. Product availability in Oceania is being closely monitored as the end of the milk production season nears. New Zealand suppliers are in the tightest position with Australian suppliers a little more comfortable.
With the current volatility in the marketplace, many buyers are resisting asking prices and are taking a break until stability returns.
1100c steve schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 15, 2010 (REPORT 15)
WESTERN OVERVIEW: The European milk production season is increasing seasonally, although 4 - 6 weeks later than usual. Milk producers and handlers are stating that a cold and snowy winter season extended further into the early months of the new year which is not usually the case. Although total milk output continues to trail last season at this time, recent weather patterns are now contributing to steady production increases.
The new milk quota year began on April 1 and with the slow start to the milk production season, very limited volumes of milk, if any at all, were withheld from the market during the later days of March to maintain quota guidelines. In years past, early April milk receipts jumped in some countries, but this was not the situation this year. In many instances, pasture growth is slow and grazing is still a few weeks away. European traders and handlers indicate that new dairy product availability is building, but often lighter than desired for this time of the season. Strong domestic demand for fresh dairy products is limiting volumes available for an international market at this time.
European traders are closely monitoring and analyzing what impact the sharply higher values for various dairy products realized at the recent global/Dairy Trading event may have on European supplies. Most traders state that prices are higher, but not by the 20 - 25% recorded at the trading event.
At the most recent Dairy Management Committee meeting on April 8th, no significant dairy issues were addressed or changed. There were a few offers for tender refunds for skim milk powder and butter but these were all rejected. Common refunds remain at zero. The private storage aid scheme (PSA) for butter opened in March and during the first month, under 10,000 MT of butter cleared to the program. Also, intervention opened in March and no butter or skim milk powder has been offered to the program thus far. Last year at this time, maximum levels of intervention were filled for butter and subsequent offerings were being accepted under a tendering system. Skim milk powder offerings were at 97,350 MT of the maximum 109,000 MT.
EASTERN OVERVIEW: Milk production growth in Eastern Europe continues to lag last year at this time. Typically, milk volumes in this region would be on the increase, but late cold winter weather patterns have slowed the arrival of spring.
Trader and handlers of manufactured dairy products indicate that supply availability is limited at this time, but
anticipate this situation to quickly remedy itself once spring weather patterns return. At this time, most sales activity is
centered around a domestic market. Some Eastern traders are wondering if they will get any part of a recent milk powder
tender that was due earlier this week.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 1, 2010 (REPORT 13)
OCEANIA OVERVIEW: The Oceania milk production season continues to wind down at varying rates. In New Zealand, especially on the North Island, milk production has dropped sharply over the past few weeks and milk producers and handlers are not anticipating recovery to occur. Lack of moisture during the fall is the major factor contributing to the sharp decline. Milk output is dropping so quickly that some farmers are reducing their milkings to one per day with some deciding to dry off their herds earlier than projected. This is bringing a quick end to the production season on the North Island. On the South Island, total milk output is not as heavy as on the North Island, but milk volumes continue to run ahead of projections. With these recent trends, milk production estimates for the year in New Zealand are again being adjusted to be more in the flat to a 1% increase level over last season.
New Zealand milk handlers and manufacturers are very concerned about end of season commitments. Current milk volumes are being directed toward whole milk powder production when possible. Some caseinate production continues to occur at remote locations, but for the most part, the casein production season is over.
In Australia, the milk production season is trending lower, but February production data indicates that, as hoped, late season production might realize some recovery. During the month, milk volumes continued to trail last February by 3.8%, bring the year to date figure (eight months) to down 6.4%. This is the first month in many that previous year comparables were not nearing -10%.
In recent weeks, commodity prices for most all manufactured dairy products have increased. Traders and handlers are stating that the market is firm and that supply, or lack of supply, will be that major factor in market conditions and pricing for the foreseeable future. Oceania traders, along with other international traders are very curious about the outcome of the upcoming global/Dairy Trading activity that will occur early next week. Most all are projecting firmer prices, but how firm is their question. Traders are stating that with the New Zealand milk production season ending sooner that projected, slow milk output development in Europe, and an international market that needs dairy products, supply availability will be a major factor and this trading event might start to show how aggressive buyers might be to secure stock, especially in future shipment periods.
1100c steve schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 1, 2010 (REPORT 13)
WESTERN OVERVIEW: The development of the European milk production season is slower than projected. In many instances, the cold and snowy winter season extended further into early spring than is usual. In recent days, temperatures and weather patterns are more conducive to early spring, but much later than usual.
The milk quota year for 2009 - 2010 concluded on March 31. For the most part, all countries are within quota levels with the exception of possibly two. Italy, usually above quota, is within quota levels this year due to the 5% quota increase that was realized for milk producers in that country during the 2009 - 2010 year. Italy will not receive any more quota adjustments from now through the end of the quota program in 2015.
At the most recent Dairy Management committee meeting two weeks ago, no significant dairy issues were addressed or changed. Export refunds remain at zero and no dairy products have cleared to
interventions since the beginning of the new intervention open season. With current milk production levels lower than projected, current milk volumes continue to clear to cheese production when possible. Strong cheese demand is the major factor contributing to the move. Other manufactured dairy product (butter, skim, and whole milk powder) output is lighter than desired, thus these products are often limited
and tight. Strong and solid internal demand for dairy products is also limiting volumes available for international buyer interest at this time of the season.
From the recent milk powder tender that was finalized in recent weeks, traders and handlers feel that the majority of the milk powder will come from European sources. They are also stating that another tender is in the works for additional milk powder.
EASTERN OVERVIEW: Late winter weather pattern continue to be reported in Eastern Europe, thus development of the new milk production season is still weeks away. Milk producers and handlers are speculating that the season will also be pushed back further as is the case in Western regions. Some Eastern European traders and handlers are stating that they will be involved with supplying some of the milk powder that was sought in the recent milk powder tender. They are also stating that they will probably submit bids for the new tender that has been recently announced. Supplies of manufactured
dairy products are limited in Eastern Europe at this time as the new milk production has not yet begun.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. March 18, 2010 (REPORT 11)
OCEANIA OVERVIEW: The milk production season in the Oceania region continues to wind down. In New Zealand, milk volumes are trailing projections, but milk handlers continue to project an overall milk volume increase of 2% over last season at seasons end. During the down side of the production season, some areas were quite limited on moisture which negatively impacted pasture growth and milk production. In recent days, some moisture has fallen which will help pasture growth, but will have minimal impact on milk output recovery. Milk handlers state that the downward trend in milk output may level somewhat. This is the time of the season when milk volumes are shifted from one location to another if logistically and financially feasible. In some instances, this is not possible and plants continue to operate on reduced schedules. Casein production has basically ceased for the season, although one plant is still in operation due to logistic constraints.
In Australia, milk output is on the down side, although the decline will hopefully not be as sharp as in some years and some of the seasonal declines thus far can be recovered. Milk producers and handlers are stating that rainfall during the second half of the production season has been more favorable than in recent years, thus pasture growth is being maintained better by rainfall versus low irrigation water levels. Many traders and handlers are stating that buyer interest appears to be improving. In many instances, Oceania suppliers have minimal, if any, product available for this buyer interest. Many do indicate that their projected volume needs will not be attained this season, but also state that they are comfortable with their supply/demand situation at this time.
1100c steve schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. March 18, 2010 (REPORT 11)
WESTERN OVERVIEW: Late winter weather patterns continue to plague much of Europe as spring weather conditions are slow to develop. Milk producers and handlers state that these weather patterns are very unusual for this time of the season. Typically, weather patterns are much more favorable at this time and seasonal milk increases are much more noticeable. This year, increases are being reported, although much lower than previous year comparables.
The milk quota yearend is near and early projections are that possibly Denmark, The Netherlands, and typically Italy will be above quota levels, while the majority of countries are below. A new quota year begins April 1 and another 1% increase will occur. The milk quota program in Europe will terminate with the April 2014 - March 2015 fiscal year. Milk handlers are projecting that for most of the countries that are below quota levels, economics of milk production is the leading factor to milk output not attaining quota levels.
Traders and handlers of manufactured dairy products are speculating that another milk powder tender may be in the near future. Many feel that they will be better able to bid on this possibility. Many felt that the recent tender's delivery timeline limited their participation. A new intervention year began March 1 and at this time, no butter or skim milk powder has been offered into the program. Intervention inventories continue to run in the 250,000 MT (551,150,000 pounds) plus category for skim milk powder and over 75,000 MT (165,345,000 pounds) of butter. Some volume of both of these products is committed to domestic food programs.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. March 4, 2010 (REPORT 09)
OCEANIA OVERVIEW: January 2010 Australian milk output trailed January 2009 by 9.1%; while July-January season to date figures are running 6.6% lower than the prior year period. Current milk production is moving higher and indicated to be closing the production gap when compared to a year ago. Rainfall of recent weeks has increased pasture growth and has helped feed quality and translated into improved milk output. The growth in milk per cow is allowing the total milk supply to improve. The product mix at the processor level has not changed or been impacted by the milk supplies. The common expectations are for seasonal milk production figures to close the milk production year at around -4%. Feed prices remain relatively low and allowing for supplemental feeding.
New Zealand milk production continues to trend higher and current output is tracking slightly higher than a year ago with total season estimates still expected to be above the prior year. Buying interest early in the reporting period was slow as buyers assessed needs and producers watched pricing directions on international markets. The results of the March 2 global/Dairy Trading event are being reported. Skim milk powder (SMP) traded for the first time at the event and all period deliveries averaged $2927 per MT. May deliveries averaged $2825; June - August deliveries averaged $3143; and September - November deliveries averaged $2927. Trades of whole milk powder (WMP) averaged $3281 per MT (-0.8%). May deliveries averaged $3291 (+2.8%); June - August deliveries averaged $3337 (+0.9%); and September - November deliveries averaged $3204 (-2.5%). For anhydrous milkfat, trades averaged $3959 per MT (-5.4%). May deliveries averaged $4008 (-3.8%); June - August deliveries averaged $3976 (-5.2%); and September - November deliveries averaged $3884 (-7.1%).
Current butter pricing is mostly unchanged with offerings often trending lower. Demand is fair and along expected
levels. Seasonal butter production is along projected levels. Cream supplies are adequate. SMP pricing is mostly steady to higher. Production levels are seasonal. Demand is fair to good for current offerings. A majority of SMP has been committed for the season and sellers are working at moving their remaining powder. The trade is assessing market weakness in the U.S. and what impact that could have on the local market price.
Whole milk powder pricing levels are steady to higher and are reflecting firmer trading levels at the recent auction and some related trades. Supplies are generally in good balance. Production trends are steady and expected to continue on with the seasonal milk supplies.
Oceania cheese prices have trended lower with some pricing pressures evident in other world markets. Regional demand remains mixed with some buyers well covered for the current season and others filing in some needs. Production is along expectations and cheese supplies are available on a limited basis to fill in needs.
1100c Butch Speth (608)250-3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. MADISON, WI. March 4, 2010 (REPORT 9)
WESTERN OVERVIEW: The effects of a cold winter season continue to impact milk production in Western Europe. Seemingly, most all countries are seeing milk intakes trending lower in recent weeks with intakes more stable this week. Trade indications of milk output changes this year in selected countries showed Ireland down 10%, France down 2%, Germany lower, and Austria steady. Localized rains were heavy and caused some flooding in parts of France, yet the impact on milk output was not noticed.
Intervention is not receiving any current dairy products and current stocks are closed. European butter prices are steady to slightly higher with an unsettled market tone. Production is mainly steady with the recent period and market conditions generally balanced. Exporting is light.
Whey prices moved slightly lower, although the market tone is stable. Some of the price adjustments are due to lower currency valuation. Whey output is steady to trending higher where cheese production is building. Whey demand is mostly along projections for local sales, while exports are mixed.
European skim milk powder market prices are steady to higher and the market undertone is firmer than in recent weeks. For Europe, production is steady to lower with milk moving to cheese production. Whole milk powder prices are unchanged to slightly higher. The market undertone is mostly steady, helped by pricing levels in other regions. Traders and handlers still expect that European SMP and WMP will be utilized to fill a recent tender.
EASTERN OVERVIEW: Eastern European milk production levels are slowly improving following relatively poor winter conditions characterized by cold temperatures and heavy snowfalls. Milk intakes at processing plants remain below projections. Finished products are in tighter positions than expected and buyers are reaching to other countries to secure dairy products.
1030CT Butch Speth (608)250-3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. February 18, 2010 (REPORT 07)
OCEANIA OVERVIEW: Oceania milk production continues to decline, but milk producers and handlers are optimistic about the balance of the season. Although some dairying regions in both Australia and New Zealand have battled with lack of moisture during the current season, the outlook for the balance of the season is more positive.
Varying moisture levels are causing pasture growth to be irregular in many areas, although favorably priced feed costs may encourage dairy producers to feed heavier volumes of supplemental grains which typically enhances milk output.
Milk producers and handlers in New Zealand are revising their seasonal projections and now anticipate that total milk output for the year will be about 1% above last year levels. In Australia, rainfall has been reported in many of the dairy regions of the country during recent days. This will help with pasture growth, but summer temperatures can quickly diminish moisture levels.
In Australia, official December milk production figures were recently released which indicated that output was down 9.6% when compared to last December. Cumulatively, for the first six months of the season (July - December), milk production was trailing last season by 6.2%. Although cumulative figures are presently in the 6% below last season range, many milk handlers are projecting that the final figure for the entire year will be better and are projecting cumulative 2009 - 2010 milk production to be more in the 4% below last season range.
Manufacturers and handlers of dairy products continue to adjust prices to remain competitive with other international prices. Although prices are trending lower, manufacturers report that surplus stocks are limited for spot buyers. International buyer interest for Oceania traders and handlers has slowed as the Chinese New Year is being observed at this time. They anticipate that buyer interest will remain slow for the balance of this week, but will start to gain momentum next week.
Traders and handlers are awaiting the results on the upcoming global/Dairy Trading event on March 2. Whole milk powder and anhydrous milk fat continue to be traded with skim milk powder coming onto the platform for the first time at the March 2 event.
0930c steve Schneeberger (608)250-3204)
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. February 18, 2010 (REPORT 7)
WESTERN OVERVIEW: Cold temperatures throughout many areas of Europe are limiting milk production growth to levels that are lower than last year at this time. Although milk output is lower than last season, most milk handlers are not overly concerned and state that growth will occur when weather conditions are more favorable. Many state that this will probably push peak level attainment to a little later in the spring which should be no problem.
Many traders and handlers are closely monitoring the outcome of a recent milk powder tender for March - May delivery. No specific volumes are known, but traders speculate that between 30,000 and 50,000 MT of a combination of skim and whole milk powder are being sought. They are also speculating, that with the near term delivery period, much of the powder will probably be sourced from Europe. The end of the current open season intervention year is February 28 with the new season beginning on March 1.
Traders and handlers expect that in the short term, no intervention purchases will occur. The new year program will
run for 6 months (March - August) with intervention price levels of 1,698 Euros per MT for skim milk powder and 2,217.5
Euros per MT for butter being unchanged from last season. Maximum levels of 30,000 MT of butter and 109,000 MT of skim milk power will be purchased at prevailing intervention levels.
Current market conditions are at a completely different stage than they were last year at this time. Last year, purchases for both butter and skim milk powder were heavy once the program was open with butter attaining maximum levels very quickly with skim milk powder attaining maximum levels a while later. Also last year, the open season was extended to include a full twelve months versus the traditional 6 months. At the February 18th Dairy Management Committee meeting, no significant dairy adjustments were reported and export refunds were unchanged at zero.
EASTERN OVERVIEW: In Eastern Europe, winter weather conditions continue and milk production remains seasonally low. It will be a month or so before noticeable increases are reported from this region. Eastern European manufacturers and handlers are wondering how involved they may be with the recently announced milk powder tender, especially due to the near term delivery period of March - May. They feel that they will be in a better position to fill needs during the end of the shipment period versus early in March.
0930CT steve Schneeberger (608)250-3204
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
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. February 4, 2010 (REPORT 5)
WESTERN OVERVIEW: Milk production throughout Europe remains seasonally low, although more signs of seasonal increases are once again being reported. Winter weather conditions and varying temperatures are being reported throughout Europe, thus the start to the new milk production season is spotty.
Traders and handlers of manufactured dairy products indicate that prices are trending lower. Stocks of dairy products are available for current or near term needs. The majority of available stock is still from last season with minimal volumes of new production yet available. Current skim milk prices are trending lower but still remain above intervention price levels.
The current term of intervention is still open until the end of the month and any offerings would receive payment under a tendering system. March 1 is the start of a new intervention year and full restitution would be received for offerings at that time until maximum levels are attained. As far as clearances to intervention, traders and handlers state that prices are still 10% above intervention levels, thus prices will need to trend lower before this possibility might occur.
Many continue to question when current intervention stocks might be released into the market. Many feel that initial releases will come as food aid and then are not sure how or when additional offerings might be released. At the February 4th Dairy Management Committee meeting, no significant dairy adjustments were reported.
EASTERN OVERVIEW: In Eastern Europe, winter weather conditions continue, thus milk production remains at
seasonally low levels. The new milk season typically still has 4 - 6 weeks to go before noticeable increases start to
develop. Cold temperatures and winter weather conditions continue to be the norm for this region of Europe. Traders
and handlers state that stocks of manufactured dairy products are available, but buyer interest is slow. They indicate that market conditions were steady as the new year arrived, but now are trending weaker.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. January 21, 2010 (REPORT 03)
OCEANIA OVERVIEW: Oceania milk production is on the down side of the season with some area declines quite noticeable.
In New Zealand, an El Nino weather pattern is impacting areas of Central and further North on the North Island. Reports indicate that output in some of this area is down 15% from projections. Already in this area, a casein plant has been shuttered, six weeks earlier than usual. Elsewhere in New Zealand, milk output is being impacted by weather patterns, but not to the extent of Central and Northern areas. Milk producers and handlers indicate that rainfall is needed in the very near future to re-establish pasture growth. They state that this rainfall must occur for at least a week to impact depleted moisture levels.
In Australia, weather patterns are also impacting dairy regions, but not to the extent of Northern New Zealand. Australian milk production figures for November were recently released which indicated that milk output for November was down 6.8% when compared to November 2008. On a cumulative year to date basis (July - November), milk output is trailing last year comparables by 5.4%. In Victoria, the major milk production region of Australia, Novembers production was down 10.0% with the Northern area of Victoria recording a 17.6% decline. Overall milk volumes are declining at a more gradual pace than their New Zealand counterparts.
Manufacturing schedules are declining in both countries with stocks being generated for known needs. In most instances, stocks are adequate for ongoing and regular customers with basically no stock available for new or spot needs. Traders and handlers indicate that buyer interest is present, but no product is available to fill these inquiries from the Oceania region.
Following the results of the most recent global/Dairy Trading event in New Zealand on February 2, many traders and handlers adjusted their near term prices to be in line with the auction averages. Supplies of whole milk powder appear to be tighter in Australia, as no Australian whole milk powder was available for the January auction. Anhydrous milkfat traded slightly higher in January following a sharp decline in December. Also in the past few weeks, it was announced that skim milk powder will be traded at the March auction for the first time.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. January 21, 2010 (REPORT 3)
WESTERN OVERVIEW: Milk production throughout Europe remains seasonally low. Some signs of seasonal increases reported a few weeks ago have subsided as colder temperatures and winter weather patterns returned. In recent days, temperatures and conditions have improved, but no signs of recovery are being reported at this time.
At the January 21st Dairy Management committee meeting, no significant changes have occurred to dairy related programs. Export refund remain at zero and the Commission continues to indicate that it is too early to start releasing butter and skim milk powder onto the market. Many within the industry are speculating that it will probably be after the upcoming spring milk flush before product is released. Traders and handler indicate that stocks are available for both domestic and international buyer interest.
Prices for most manufactured dairy products, except whey, are trending lower. Many manufacturers and handlers would like to clear these stocks before the new milk production season resumes and additional offerings become available. At this point, sales, especially internationally, are slow, but buyer inquiry is starting to resume. Traders and handlers speculate that no significant sales will occur especially as prices
decline. They feel that buyers have waited this long to re-enter the marketplace, waiting awhile long will probably be the case.
EASTERN OVERVIEW: Winter weather conditions in Eastern Europe continue, thus limiting any type of early start to the upcoming milk production season. Typically, Eastern European milk production does not show signs of increases until late February, thus dairy product manufacturers and handlers are stating that the upcoming season appears to not be any different at this time. Traders and handlers state that stocks are available for immediate clearance and many are hoping to clear these volumes before the new season resumes. At this point, sales activity remains slow.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. January 7, 2010 (REPORT 01)
OCEANIA OVERVIEW: The Oceania milk production season continues to wind down. Milk handlers state that projected peak levels were not attained, thus they hope that the decline will be gradual. Milk production projections were adjusted from previous levels in New Zealand recently and are now pegged at 1.5% ahead of last season.
In Australia, milk production trends are not as positive. For the first 4 months of the season (July - October) cumulative milk output is running 5% behind last season and many milk handlers do not anticipate that this figure will improve much, if at all, for November.
The yearend holiday period has been quiet for most traders and handlers. Manufacturing schedules were maintained during this time period and stocks continue to clear Oceania ports. In most instances, traders report that prices are unchanged to lower. Weakening trends in some international markets could stimulate further adjustments within Oceania sources. Traders and handlers state that stocks are in close balance to short with some Oceania suppliers looking to outside sources for supplemental stocks.
At the January 5th global/Dairy Trading event, the average whole milk powder price declined for the first time since July. The average price was $3,309 per MT, 7.05% lower than last month. The near term delivery (March) averaged $3,282 (-6.83%), April - June averaged $3,255 (-8.05%), and July - September deliveries averaged $3,523 (-5.2%). The average anhydrous milk fat (AMF) price of $4,539 per MT was 4.37% higher than last month. Near term anhydrous deliveries (March) averaged $4,517 (+2.53%), April-June deliveries averaged $4,493 (+3.81%), and July - September deliveries averaged $4,735 (+9.23%).
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. January 7, 2010 (REPORT 1)
WESTERN OVERVIEW: The European milk production season remains at seasonally low levels, although more indications of increases are being reported. Milk handlers indicate that the increases are not significant, but noticeable. Milk volumes during the past holiday period were at projected levels with much of the milk clearing to cheese manufacturing. Traders and handlers stated that market activity during the past few weeks was very light, but is projected to increase as the new year unfolds.
Manufacturers and handlers of dairy products indicate that stocks are available for immediate or near term buyer interest. Details of the recent milk powder tender remain vague. Many traders and handlers state that it is quite difficult to put together a cumulative total of skim and whole milk powder volumes that will be needed to fill this tender. Many still feel that the majority of skim milk powder will be sourced from Europe with Europe and other regions of the world filling the whole milk need
EASTERN OVERVIEW: Milk output in Eastern Europe remains at seasonally low level. Winter weather conditions prevail in most Eastern European countries which will limit production growth for a number of weeks. Usually, Eastern European milk production lags Western European production development by six weeks or so, thus no noticeable increases are anticipated until mid February.
Traders and handlers state that sales during the past two weeks have been slow as most buyers were absent from the market, observing the year end holidays.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. December 24, 2009 (REPORT 51)
OCEANIA OVERVIEW: Milk production in the Oceania region is now on the down side in both Australia and New Zealand. Milk handlers in New Zealand have reduced their overall production projections to be more in line with a 1 - 1 1/2% increase over last season versus the 2 - 3% higher projected earlier in the season.
Australian milk production figures for October were recently released and indicated that output for the month was 7.4% lower than October 2008. Output for the month in Victoria was down 9.8% with Tasmania trailing last October by 5.3%. Cumulatively, milk production is trailing last season by 5.0% for the first four months (July - October) of the year. Although official milk production data is not available for November yet, milk handlers are projecting that output for November will probably be much like the 7% decline recorded in October. Milk handlers are stating that they had hoped that the peak, lower than projected, would have held steady longer before starting to decline. As milk volumes edge lower, manufacturing plants are juggling milk volumes and directing them to products of most need and best returns.
Some manufacturers and handlers state that there are supply gaps in basically all manufactured dairy products, but they are trying to fill those gaps with available milk supplies. Some handlers are looking to outside sources to supplement local stocks. Overall buyer interest remains strong for Oceania sourced dairy products, but is slowing as the yearend holidays are now here. Most buyers secured needed stocks to get them through the year end holiday period and shipments will resume early in 2010.
Some traders and handlers are stating that prices seem to have stabilized for the time being. They are not sure what will happen in the new year, but for now, there appears to be no strength in the market.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. December 24, 2009 (REPORT 51)
WESTERN OVERVIEW: The European milk production season is at seasonal low levels in most countries, although some milk handlers are reporting that milk intakes are starting to increase. In Germany, milk volumes are running ahead of last season by nearly 2%, while most countries are running behind previous year levels.
Milk handlers are preparing for the upcoming holiday period when milk volumes will often become excessive of need. Many feel that butter/powder will probably get the first tilt of milk volumes with other manufactured dairy products absorbing the balance. Traders and handlers still do not have a firm grasp of the recent milk powder tender results. It is felt that a significant portion of the skim milk powder will be sourced from Europe with the whole milk powder probably being divided between Europe and other international sources.
Prices for most all European dairy products are lower than recent months. A weak Euro against the U.S. dollar is one factor
influencing lower prices, coupled with available supplies and light demand. European prices have been firmer than other
international prices for much of the fall, thus European prices are now adjusting lower to be more competitive internationally.
Overall sales are light at this time as most buyers are in holiday mode. Traders anticipate that buyer interest will pick
up in the New Year as prices adjust, knowing that stock is available. Some traders are now questioning what impact lower
prices may have on the recent milk powder tender.
EASTERN OVERVIEW: Milk output in Eastern Europe is at seasonally low levels with no reports of increases yet. Most milk producers are in winter mode and will not realize production increases until mid to later January. Manufacturers and handlers of dairy products report that stocks are available with many adjusting their prices to remain competitive. At this time, no significant new sales are being reported as most buyers are absent from the marketplace during this holiday period of the year.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. December 10, 2009 (REPORT 49)
OCEANIA OVERVIEW: Milk production in the Oceania region is now past the peak in both Australia and New Zealand. Milk handlers in both countries state that peak milk volumes did not reach projected levels.
In New Zealand, early season projections of a 2 1/2 - 3% increase over last season have been adjusted to now be in the 1 - 1 1/2% higher range.
Australian production has trailed last year since the start of the current season in July. The most recent figures for September indicate that cumulative production (3 months) is trailing last year by 3.9%. Many milk processors anticipate that future output will probably not be strong enough to make up for early season declines.
In Australia, measureable moisture has been occurring in many dairy regions, although some milk handlers state that although moisture has been plentiful, it has occurred at the wrong time or places. In Murray Darling watershed, moisture has fallen in good volumes to once again replenish water reserves to near 60%. This will greatly provide much needed water during the upcoming summer months when rainfall is often limited. This moisture will especially come in handy if the El Nino weather pattern develops as some weather forecasts indicate.
At the December 1 global/Dairy Trade event for whole milk powder, the average price was $3,560 per MT, 3.6% higher than the previous month's average. Near term shipments (February 2010) averaged $3,523 per MT, 5.1% higher than the previous event, March - May shipments averaged $3,540 (+4.3%) and June - August shipments averaged $3,716, (+0.9%). The second trading event occurred for anhydrous milk fat and averaged $4,349 per MT (-8.6%). Near term (February 2010) shipments averaged $4,406 per MT (-8.4%), March - May averaged $4,328 (-8.5%), and June - August shipments averaged $4,335 (-8.4%). Many international traders and handlers monitor this trading activity and often adjust their prices accordingly if they see fit.
Oceania traders and handlers state that Oceania product availability is often limited as much of their current production and stock is committed to regular and ongoing customers. With tight supplies being reported, some Oceania traders and handlers are looking to outside sources for supplemental stock.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. December 10, 2009 (REPORT 49)
WESTERN OVERVIEW: The European milk production season is at or very near seasonal low levels. During the upcoming holiday period, manufacturers anticipate that available milk supplies for manufacturing will be directed toward butter/powder production.
Most milk producers are now in winter mode. Feed stocks are reported to be in decent shape for the winter months with feed costs not overly excessive, thus lightening the burden of financial stress on producers.
Within the past few weeks, some results of the recent milk powder tender are being revealed. No clear picture of the total tender volume is available, although some European traders are speculating that between 35,000 - 40,000 MT of milk powder will be shipped from now through February. They feel that the tender will be split about 50/50 between skim and whole milk powder. Traders project that a significant portion of the skim milk powder will come from Europe
with Europe and South American sources supplying the whole milk powder.
Traders and handlers state that they are adjusting to the loss of export refunds. Outside of recent tender sales, overall sales activity has slowed as many buyers have already shifted into yearend/holiday mode.
EASTERN OVERVIEW: Milk output in Eastern Europe is at seasonally low levels. Temperatures are declining, although no significant winter conditions are being reported. Eastern European manufacturers will be supplying some of the milk powder for the recent tender. A significant portion of skim milk powder is projected to come from Europe with Europe and other sources supplying the whole milk powder. Eastern European traders and handlers are also adjusting to the loss of export refunds which is often causing offerings to be cost restrictive.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. November 25, 2009 (REPORT 47)
OCEANIA OVERVIEW: Milk production in the Oceania region is at seasonal peak levels, but is often lower than anticipated. Recent adverse weather conditions on the North Island of New Zealand have slowed and impacted the milk production flow. Some milk handlers are now projecting that overall milk output for the season will be at or slightly higher than last year. Conditions on the South Island are more favorable, although the North Island is where the majority of the milk is produced.
In Australia, the milk production season is also not at projected levels. Some much needed rainfall occurred earlier in the season, although cool/wet conditions prevented decent growing patterns. In the past few weeks, hot temperatures were being reported which may slow any production growth at peak output time. Many producers and handlers reported that these hot conditions at this time of the milk production season are not good and will probably negatively impact the entire season. In the past few days, heavy rainfall was once again reported in many dairy regions of Australia. This rainfall will greatly help depleted moisture levels of recent years and help with early summer pasture growth. September milk production figures for Australia were recently released which indicated that output during the month was down 7.2% from last September. This negative September figure brings the cumulative (July - September) milk output figure to -3.9%. Milk handlers are projecting that recent hot temperatures will not improve this figure.
With these milk production trends occurring in both New Zealand and Australia, some manufacturers and handlers are delaying shipments until 2010 and, in instances, cancelling some commitments. These conditions are also causing manufacturers and handlers to be very cautious with their second half commitments.
Demand for Oceania products remains strong and some Oceania suppliers are looking to outside sources to supplement local output in an unforeseen supply situation.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. November 25, 2009 (REPORT 47)
WESTERN OVERVIEW: Milk production in Europe is very near the bottom of the annual cycle in most regions of Europe. In many instances, milk volumes are not at quota levels, with The Netherlands probably the closest to quota.
For the EU as a whole, thru September, milk production is down 1.3% when compared to last year at this time. At the November 19th Dairy Management Committee meeting in Brussels, the common refunds on butter and butteroil were set to zero. As a result, there are no common refunds for any dairy products any longer, although exports continue to occur with subsidies that were granted earlier. Under the tendering system, no offers for butter or butteroil were received and all offers for skim milk powder were rejected. As has been the case for many weeks, there were no offers for butter or skim milk powder to intervention during the past two weeks.
Intervention totals for butter are about 76,000 MT and skim milk powder totals are nearly 267,500 MT. PSA butter totals remain at slightly more than 136,000 MT.
Many European traders have been actively preparing bids for a tender seeking skim and whole milk powder. Total volumes are not clear, but some traders are speculating that a combination of milk powders might total between 35,000 - 40,000 MT. Most feel that the tender will be filled from European sources. The clock is ticking for those traders that still have prefixed subsidies which will help price their bids more competitively.
EASTERN OVERVIEW: In most countries of Eastern Europe, milk production is at or very near seasonal low levels. Available milk volumes are competitive for production of products of greatest need or best return. Currently, traders and handlers feel that Eastern European stocks should be available for potential buyer interest, especially for a tender looking for skim and whole milk powder.
0930CT steve Schneeberger (608)250-3204
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
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. November 12, 2009 (REPORT 45)
WESTERN OVERVIEW: Milk production in Western Europe continues to decline seasonally and often is running behind last year comparable figures. Milk output is nearing seasonal low levels. In parts of Western Europe, cool and wet conditions are being reported which is very typical for this time of the season. As milk volumes decline, so are manufacturing schedules. In most instances, milk is being directed towards products of most need or best return. Traders and handlers state that stocks of various dairy products are limited to the point that prices continue to rise for a supply driven market. Traders and handlers are making adjustments to their marketing and sales strategies following the removal of most export subsidies.
Traders indicate that there is buyer resistance at the higher prices. Some traders and handlers anticipate that a major buyer might be returning to the marketplace in the very near future and they are preparing to see how they might be able to participate in the buyer's inquiry.
At the November 5 Dairy Management Committee meeting, all common export refunds were reduced to zero except for butter and butteroil which were reduced by 61%: 82% butter is now 145 Euros per MT; 80% butter, 141.5 Euros; and butteroil is 175.6 Euros. In recent weeks, no butter or skim milk powder has been offered to the intervention program and intervention skim milk holding total 267,458 MT and butter totals are 76,449 MT. PSA butter holdings total 136,080 MT.
EASTERN OVERVIEW: Eastern European milk production is also nearing seasonal low levels and typical late season weather
conditions are also being reported. Manufacturing facilities throughout the region are gearing back processing schedules with some operations already shuttered for the winter season. In many instances, current production and inventoried stocks are being utilized locally with export activity lighter than anticipated.
0930CT steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. October 29, 2009 (REPORT 43)
OCEANIA OVERVIEW: Milk production across much of New Zealand is trending upwards seasonally, yet tracking lower than year ago levels due to recent adverse weather conditions. Some of most severe snowy conditions a few weeks ago were in areas with less sparsely populated dairies, yet those intakes were affected. Currency valuations gauged against the US Dollar are mitigating the absolute increase in product price gains.
Australian milk production patterns are lower with September estimates at 8% lower than last year and brings the Milk Year to date total at 4% below a year earlier. Rains in September were limiting milk output growth, yet provided relief to areas suffering from prolonged drought conditions. The forecasts are for El Nino events with drier than normal conditions in coming months which would then be projected to limit milk output growth.
Dairy product prices in the regions are sharply higher from two weeks ago. Part of the increase in the region is the decrease in the EU export refunds. Countering the gains is the effects of target ="_blank"/the strong local currencies when measuring against the US Dollar. Both SMP and WMP prices have gained appreciably. Export interest is fair to good, clearing product, and tightening stock supplies. Milk supplies are often being moved to WMP production for competitive reasons. Butter demand is improved for export and domestic accounts. Stock levels are building at lower rates than in prior years. Cheddar cheese prices are higher, the market a benefactor of higher powder pricing levels. Demand is developing, but at a slower pace than other commodities.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. October 29, 2009 (REPORT 43)
WESTERN OVERVIEW: Milk production in Western European countries is often lower than a year ago and trending lower week to week on a seasonal basis. Weather conditions have been neutral to milk output with the general economic conditions the major factor in the reduced overall levels. Milk prices are often being stepped up slightly, which will be favorable at the farm level.
Assistance programs are also being worked out with monies allocated but details being negotiated. On October 22, the Common (export) refunds were set at zero for SMP, reduced roughly in half for butter (now 37.7 Euros/100kg) and WMP (now 17.50 Euros/100kg), and unchanged for cheese (22 Euros/100kg). Butter, butteroil, SMP, WMP, and whey prices moved higher during this biweekly period and are in step with other world regions.
Exporting out of Europe is slowing with the current lighter product stocks a big reason. The subsidy declines will also
factor into the equation.
EASTERN OVERVIEW: Eastern European milk production continues to be at levels lower to sharply lower than a year ago. The impact of lower milk prices has hampered any growth potential. Processing plants are running on reduced schedules and much as the milk flow allows. Production of dairy products is lower than forecasts and much of current output is being utilized locally with exporting then lower than projected.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. October 15, 2009 (REPORT 41)
OCEANIA OVERVIEW: Milk production in New Zealand continues to build from the slow start of the season. In the past few weeks, milk output has gained steadily to basically catch up with projections for this time of the season. Within in the past week, cold temperatures and snowfall, not seen in many years, has occurred on the north island. Milk producers and handlers are not sure what impact this may have on milk output near season peak levels, although they continue to project a 2% increase over last season.
In Australia, much needed rainfall has occurred in September and early October which is greatly enhancing depleted moisture levels in many dairy regions of the country. Some reports indicate that water is once again back in lakes that have been empty or very low in recent years. Although rainfall is occurring, cold and wet conditions are slowing production growth.
In Australia, milk output for August was down 1.5% from August 2008 and is down 1.6% on a cumulative basis for the first two months of the 2009 - 2010 season. Milk handlers are not overly concerned with this negative trend as the start to the season last year was stronger than this year. Colder conditions in September and early October may minimize growth, but much needed moisture will be beneficial as temperatures warm.
Prices for most all manufactured dairy products are higher. Traders and handlers state that firm currencies against the U.S. dollar are one of the factors for higher prices. Another factor is that supplies are in close balance with known needs and in instances, short of desired levels. Most traders and handlers indicate that they are able to meet traditional customer needs, but have minimal volumes of stock available for new or additional buyer interest.
Many within the market are questioning if the current rapid rise in prices will be sustainable. Most feel that prices will remain firm into 2010.
930c steve schneebrger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. 15, 2009 (REPORT 41)
WESTERN OVERVIEW: Milk production in Europe continues to edge lower seasonally. At this time of the season, milk is often directed towards products of most need or best return. Although most all manufactured dairy product stocks are limited, milk is often clearing to cheese production at this time.
Now that EU prices are above intervention levels, clearances of butter and skim milk powders to intervention have virtually stopped. No butter has been offered in recent weeks, but 101 MT of skim milk powder were offered into the program from Lithuania. As of October 8, slightly more than 83,000 MT of butter and 282,500 MT of skim milk powder are in intervention.
PSA butter offerings have also slowed greatly, but 22 MT were offered into the program early in October. Cumulative PSA quantities total 135,484 MT.
Some European dairy farmers continue to push for additional EU aid. Last week, Agriculture Ministers met for a "milk summit" to discuss how to relieve the stress that declining prices have put on small farms. The ministers decided to allow up to 15,000 Euros ($22,000) of emergency cash relief for each dairy farmer, in addition to existing subsidies, and to set up a committee to study the problem. Funding and details on how this program will be implemented still need to be finalized. Also, a program entitled the "Deprived Persons Scheme" has been announced which will provide 32,000 MT of intervention butter and 96,000 MT of skim milk powder to qualifying individuals. This is coming at a time when commercial stocks of dairy products in Europe are limited and spendable income for most everyone is lower.
As the milk production season recedes, commercial stocks of manufactured dairy products are also on the limited side. At this point, butter appears to be the strongest market with commercial prices now surpassing the $2.00 per pound level. Cream prices are also firm and demand for available volumes is aggressive. Stocks availability for other manufactured dairy products is limited and some traders and handlers are referring to buying patterns as "panic buying". As has happened before, some buyers are paying a firm price for available stock.
EASTERN OVERVIEW: Milk production in Eastern European countries continues to trend lower and is often below year ago levels. Economics of dairy production continue to cause some dairy producers to closely monitor their operations. Some are trying to maintain cash flow by reducing their herd size. As milk production declines, so are manufacturing schedules. Stocks of product are lighter than last year at this time, although available for near term needs.
0930C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. October 1, 2009 (REPORT 39)
OCEANIA OVERVIEW: New Zealand milk production has caught up to expectations after a slow start. Reports are showing current output trending 2% higher than year ago levels. Conditions are neutral to favorable for milk cows. Processing plants are running along expected levels and making planned for products.
Australia has been receiving more rainfall with some regions having the most in nine years. Current milk output is trending a couple percentage points lower, mostly attributed to declines in cow numbers. Cow yields are mostly steady with a year ago. These are early season indications. Milk prices have been stepped up from the initial milk price. Dairy product prices have moved higher in recent weeks. The trade sentiment is that recent higher whole milk prices have pulled other products up. There has been no shifting of production due to price changes.
Oceania butter prices are trending slightly higher with a firm market tone. Milk and milkfat volumes are tending to be lower than expectations and butter output is below projected early season levels. Local cream supplies are tight. Butter producers are able to fill the current local demand and prepare stocks for upcoming contracts.
Oceania skim milk powder prices are higher. The market tone is firm.
SMP production is lower than projected during the early season. Demand is improved from international sources. Recent price increases seem to have spurred buyer interest to secure product. Most current production is committed.
Whole milk powder prices moved higher and continue to reflect market firmness seen in recent weeks. There has been a shift from mild skepticism of price increases and sustainability towards more acceptance and improved buying activity. In early season production, WMP output is lower than expected. This is mainly due to lower milk receipts and a steady production mix between products. Early season stock levels are light and often committed.
Oceania cheese pricing levels have moved higher. Buying interest is fair to good. Export buyers are sometimes reluctant with some concerns for future pricing. Economic concerns are still evident in cheese markets. Current production levels are increasing seasonally.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. October 1, 2009 (REPORT 39)
WESTERN OVERVIEW: Milk production patterns are generally trending lower at levels below a year ago. Milk receipts are often lower because of milk strikes in various countries and the subsequent milk not being processed. The cause of the strike is low milk prices across Europe. Areas of France had been off 10% on milk receipts in recent weeks, but are trending towards more normal levels. Milk output in Germany is now slightly below a year ago, the first time this season.
Pricing for all finished dairy products has increased over recent weeks. Butter and butteroil prices have firmed. Market activity is mainly direct towards local usage with limited exporting. Local production of butter continues to trend lower seasonally and supplemental product is being pulled out of the PSA program. Whey prices moved moderately higher on the bottom of the range as pricing levels continue to increase. Lower cheese production is the major reason for whey declines.
SMP prices are higher in a firm market. Prices are bolstered by recent increases in other regions of the world. Current export demand is mainly to contracted accounts with limited new shipments occurring. Europe may be the best supply source in the world for SMP supply. SMP moving into the intervention program has slowed in September and is expected to cease.
The whole milk powder market remains firm and pricing levels are moving higher. The impact of higher pricing in Oceania continues to carry into other world markets, including Europe. Current offerings are limited for export accounts as demand has improved.
EASTERN OVERVIEW: Milk production is mostly following expected trends at seasonally lower levels below last year. Low milk prices and feeding decisions are the main factors in the decline in milk output across the region. Cow numbers are lower due to sales of animals for cash flow considerations. Finished dairy product output is trending lower, following the milk supply. Products are available for local needs with interest being noted from export accounts.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. SEPTEMBER 17, 2009 (REPORT 37)
OCEANIA OVERVIEW: Milk production patterns in the Oceania region continue to expand seasonally. In New Zealand, the milk production season got off to a slow start, but is showing signs of good development in recent days. Weather patterns, in New Zealand are warming up and more noticeable spring like conditions are occurring.
In Australia, the new production season is still a few weeks away before noticeable increases will be reported. Some milk handlers are projecting that lighter supplemental feeding will occur this season which will keep total milk volumes lower.
Economics of dairy production continue to impact managerial decisions in both New Zealand and Australia. An early production projection for New Zealand is 2% higher than last year with Australian projections in the flat to slightly higher range.
Following the most recent whole milk trading activity at the globalDairy Trading platform, commercial powder prices have firmed to levels recorded at the event and higher. Along with whole milk powder prices, prices for other manufactured dairy products are also firm. In many instances, firmer asking prices are being met by buyer resistance, thus often sales have slowed.
Oceania traders and handlers state that anyhydrous milk fat is in strong demand and suppliers are clearing good volumes. Due to these quick sales and clearances, fresh butter is more difficult to locate, especially early in the new milk production season. Another commodity that is realizing slower production schedules is cheese. Early in the season, manufacturers have more discretionary opportunities in how milk will be channeled and often, butter/powder and whole milk powder are receiving the tilt.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. September 17, 2009 (REPORT 37)
WESTERN OVERVIEW: Milk production continues to decline in most areas of Europe. Late summer weather conditions are favorable for this time of the season, thus declines are generally gradual. Overall, milk volumes have been lower this year as economics of dairy production have often influenced how dairy farmers are managing the situation.
In recent days, the major topic of discussion is the various milk withdrawals and strikes that dairy farmers are participating in, in hopes of strengthening the low milk prices that they are receiving. Milk farmer groups are stating the world prices have declined so much that they are selling milk at half their production costs, leaving more and more farmers unable to meet their financial obligations. The magnitude and impact on the commercial dairy industry in Europe is still unknown, but some predict that initial removals could impact some supermarkets as early as next week.
Prices for manufactured dairy products are firm across the board. Recent strength in international prices is contributing to European strength. In recent days, the Euro has strengthened to levels not seen in nearly a year. On Thursday 17 September, the Dairy Management Committee met with basically not impact on current programs. Subsidy levels were unchanged. Intervention offerings for both butter and skim milk powder have virtically ceased as commercial prices are above intervention levels.
EASTERN OVERVIEW: Milk volumes continue to decline in Eastern Europe as the milk production season winds down. Farmers in Eastern Europe are also having difficulty with their financial balance sheets as cost of production exceeds what they are getting for their milk. Stocks of manufactured dairy products are available for current and future needs. Traders and handlers state that sales activity is basically centered around an internal market with international sales light, but buyer interest is resuming.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. SEPTEMBER 3, 2009 (REPORT 35)
OCEANIA OVERVIEW: Milk production patterns in the Oceania region continue to expand, although slower than usual for this time of the season. In New Zealand, milk producers and handlers state that the season is getting off to a slower start due to a colder and wet winter season. Reports indicate that milk volumes are about 3% behind last year at this time. Pasture development is slow. One factor that may be limiting pasture development is that some farmers are making management decisions to not fertilize pastures as much as they have in past years due to economics of dairy production. Most farmers in New Zealand are looking at their operations from an economic view point and trying to make the best managerial decisions when is comes to supplemental feeding, fertilization, and animal welfare.
In Australia, the resumption of the new milk production season is still a few weeks away. Moisture, or lack of moisture, continues to be a major concern for many dairy producers. In Northern regions of Victoria where irrigation is necessary to maintain pasture growth, water allocations for the upcoming season are basically zero which will challenge producers to look to supplemental feed for animal nutrition during the upcoming season. This will put further pressure on the bottom line of an already discouraging balance sheet. An El Nino weather pattern continues to be forecast for much of Australia during the upcoming summer months. This pattern will not only impact dairy production, but agriculture in general.
On September 1, the 15th round of whole milk powder trading within the globalDairy Trading platform was held. During this trading event, the average price for all powder was $2,858 per MT which was 24.2% higher than the previous average. Prices for near term shipments for November averaged $2,872 per MT, 24.6% higher than the previous event. Prices and percentage changes for other shipment dates are: Dec - Feb shipments, $2,847, +23.4% and Mar - May shipments, $2,861, +24.9%. It has been announced that in November, anhydrous milk fat will be traded on this platform. The results of this most recent event is giving encouragement to dairy producers throughout Oceania and is also causing traders and handlers of dairy products throughout the world to optimistically look forward.
Current whole milk powder prices are at levels not seen in nearly a year. Prices for other manufactured dairy products out of Oceania are firm. Traders and handlers indicate that buyer interest is gaining momentum, although suppliers continue to move cautiously with their commitments.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. September 3, 2009 (REPORT 35)
WESTERN OVERVIEW: Milk production continues to edge lower with some areas of Europe experiencing hot temperatures which are reducing milk volumes at a more rapid rate. This reduction is milk output is causing demand for milk to be very aggressive.
During the most recent Dairy Management Committee meeting on September 3, all export refund levels were unchanged. Clearances of butter and skim milk powder to intervention have slowed greatly now that commercial pricing is higher than intervention levels. During the past week, 64 MT of butter and 3800 MT of skim powder have cleared to the program. This brings the total for butter to 83,222 MT and skim milk powder to 281,533 MT.
Clearances of butter to PSA have also slowed greatly and holdings total 134,606 MT. Butter is now moving back out of PSA, but is basically fully committed, thus doing very little to alleviate a tight butter supply. Prices for most manufactured dairy products are higher. Many European traders were surprised at the strength that whole milk powder, traded within the globalDairy trading event, realized earlier this week. Many question if the 24% price strength, compared to the previous event, will be maintained.
EASTERN OVERVIEW: Milk production continues to trend lower seasonally. Some of this trend is occurring due to warm temperatures for this time of the season, while most declines are typical. Traders and handlers indicate that they have product available for potential sale, but butter is in the tightest position. Sales are reported to be slow.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. AUGUST 20, 2009 (REPORT 33)
OCEANIA OVERVIEW: Winter weather conditions are coming to an end in the Oceania region. Milk producers and handlers are reporting that the arrival of spring and the start of a new milk production season appears to be getting a slower start than previous seasons.
In New Zealand, a wet and cold winter season is causing pasture growth to be slow in developing. Milk producers and handlers are indicating that milk volumes are starting to increase, but at a lower level than in recent years.
In Australia, the start of the new milk production season is still a few weeks away, but lack of moisture during the winter months will impact pasture re-establishment. The outlook for moisture during the upcoming production season continues to look bleak. Weather forecasts and forecasters continue to include statements or words such as El Nino, hot and dry conditions, and minimal or no water allocations in many of their comments.
All of these words and potential actuality will cause dairy producers to be more resourceful with their milk production practices. Limited moisture for pasture growth will cause dairy producers to increase supplemental feeding, adding additional expense to an already discouraging financial picture. Another factor that will potentially limit pasture growth is the lower application of fertilizer. Many farmers are just not able to apply the needed volumes of fertilizer due to economic conditions and their balance sheet bottom line.
Milk production projections for the upcoming season in New Zealand are being eased slightly as the start of the season is slower than projected. Although the "jury is still out", milk handlers now project current season output to be in line with last year.
In Australia, the 2008 - 2009 season has come to a close and output for that period was up 1.8% from the previous season. There are mixed projections for the upcoming year and most are hopeful that output will be at least at current year levels. Low pay prices, water conditions or lack there of, and overall economic conditions will all factor into how the milk production season in Australia develops.
Traders and handlers of manufactured dairy products indicate that supply and potential for supply is the leading factor in current sales and sales negotiations. Demand is reported to be fairly active, although supply is the leading concern. At this time, there is very limited volume of supply as the milk production season has not yet started, that would generate any type of volume of stock. Prices for many Oceania dairy products are increasing slightly which is giving some encouragement to milk producers and manufacturers.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. August 20, 2009 (REPORT 33)
WESTERN OVERVIEW: Milk production continues to trend lower in most regions of Europe. In some countries, especially Germany, milk output is running ahead of last year, but lower in Ireland, due to poor weather conditions. In Germany during July, milk output ran 2.8% heavier than July 2008.
Some of the current increase is being attributed to milk marketings this year being compared to lower milk marketings last year due to the
strike in Germany. Weather conditions throughout Europe have, for the most part, been more favorable this year than last. Pastures remain green and decent grazing conditions prevail.
The big concern for many will be how sharply milk output will decline once grazing ceases and animals are fed with supplemental feed stocks. The economics of dairy production continue to challenge dairy farmers, thus supplemental feed rations may be greatly altered this coming fall.
Offerings of skim milk powder continue to clear to intervention under a tendering system. No new intervention totals for butter or skim milk powder have been released by the Dairy Commission as the committee has been on holiday since late July, but will return on the 27th of August. PSA offerings have slowed and now some of the early offerings are eligible to return to the marketplace. Traders and handlers state that around 50,000 MT (110,200,000 pounds) of butter would be available at this time.
Outside of this activity, dairy product movement is slow and unaggressive. This is typical for this time of the season, but now with the summer holiday season is coming to an end, traders and handlers are hopeful that buyer interest will once again resume. Stocks of most all manufactured dairy products are readily available for potential buyers.
EASTERN OVERVIEW: Milk production in Eastern Europe continues to trend lower. Reports indicate that milk output in Poland is strong and running ahead of last year, but elsewhere, milk volumes are lower. Poor economic conditions continue to plague dairy farmers, thus many are responding to the unsettling situation by adjusting their herd sizes and feeding programs. Stocks of manufactured dairy products in Eastern Europe are available for both internal and international buyer interest. At this time, sales are reported to be slow.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. AUGUST 6, 2009 (REPORT 31)
OCEANIA OVERVIEW: The winter season is coming to an end in the Oceania region and the new milk production season will soon resume. Moisture during the winter months has often been short of desired needs and many regions, especially in Australia, will once again be struggling with limited moisture for the upcoming season. An El Nino weather pattern continues to be forecast for the Oceania region with Australia realizing the major brunt of this potential weather pattern. Hot temperatures and limited moisture will further limit pasture growth and feed availability. Although limited moisture has been a factor for many dairy producers over the past few years, farms are making or have had to adjust to the limited moisture situation by instituting supplemental feed to their dairy rations. This has allowed many dairy producers to maintain production, but also adds additional expense to an already discouraging financial picture.
Milk production projections for the upcoming season are for continued growth in New Zealand over last season by 3 - 4% with output in Australia projected to be 1% higher. Milk output in Australia during June was down 2.9% when compared to last June, but continues to run 1.8% ahead of last year on a year to date basis (11 months). Current milk production remains at low winter levels with New Zealand producers to start realizing increases by the end of August with Australian output starting to build in early September. Milk handlers in New Zealand indicate that the season may get off to a slower start due to a colder than usual winter season and economic hardships for more dairy producers.
Oceania traders and handlers state that buyer interest is strong for upcoming season output, but commitments to this need are not as heavy as in years past. Many suppliers indicate that their "order books" are at comfortable levels. Demand for milk fat, especially anhydrous and butter oil, is being reported for Southeast Asian buyers.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. August 6, 2009 (REPORT 31)
WESTERN OVERVIEW: Milk production patterns in Europe continue to follow the trends of recent weeks. Milk output is generally running slightly ahead of last season overall, with output in Germany, The Netherlands, Denmark, and Italy running ahead of last season, while in France, UK, and Ireland, receipts indicate that output is trailing last season.
These milk production patterns are providing various amounts of milk for manufacturing and drinking milk needs. When possible, milk handlers are diverting milk to products of best return and often butter/powder is obtaining higher volumes of milk when compared to years past. Much of this milk flow is due to the open season of intervention and the continuance of this program through November and hopefully through February. An official ruling will need to be issued for the program to remain open beyond November.
Currently, intervention levels are well above the maximum levels of 109,000 MT of skim milk powder and 30,000 MT of butter. Butter and powder continue to clear to intervention under a tendering system. The most recent accounting of intervention totals were released at the 23 July Management Committee at which time skim milk powder totaled 200,055 MT and butter totaled 82,777 MT. PSA totals for butter totaled 117,151 MT tons, but offerings have slowed. Traders and handlers state that international sales remain slow and unaggressive with most sales activity centered around an internal or domestic market.
EASTERN OVERVIEW: Eastern Europe milk production is on the down side of the season, but is holding up quite well when compared to last year, especially in Poland. Poor dairy economics continues to impact producers in Eastern Europe as low milk prices and firm fixed costs continue to erode farm incomes. Manufacturers and handlers of dairy products state that minimal international sales are occurring and for the most part, overall sales activity is slow. Stocks are available and continue to be generated.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JULY 23, 2009 (REPORT 29)
OCEANIA OVERVIEW: The latest Australian milk production reports show May output at 0.6% higher than May 2008. Year to date 2008/09 season output is up 2.1% from the 2007/08 season. The Victoria region, the largest producing region in the country, saw milk down 1.8% in May 2009. All other regions saw milk production increases with the largest percentage gain in Queensland (+8.8%). Weather models and forecasts for Australia are trending more negative towards an El Nino cycle and subsequently continued dry conditions for the crop season, especially so in the more southern regions.
Milk output in New Zealand remains at seasonal low levels with processor utilization being made on the best sales fit. Many plants are using the downtime for maintenance and preparing for the upcoming season. Dairy producers in Oceania are assessing options as they evaluate the initial opening milk pay prices that are 25-35% lower than during the start of the prior year. The rate of declines during the season caused a lot of producers to have negative cash flows from their dairy operations. The impact of another similar year is not welcomed, yet there is hope/sentiment that finished product prices are coming off low points and the potential for higher product prices and subsequent higher milk pay prices are present.
Dairy product prices are holding mostly steady as the current production season winds down. Most sales are towards contracted accounts or to fill in domestic needs. Sales for the upcoming production year are seeing limited price changes from current levels. The world economic factors, competition with subsidized dairy product offerings, and strong currency levels, are all creating problems for the dairy product markets to gain traction.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. July 23, 2009 (REPORT 29)
WESTERN OVERVIEW: Conditions in the countries in northwestern Europe have been generally favorable for milk production and output has been trending higher than last year in most areas. Trends of recent months are continuing with milk output higher than a year ago in selected countries - the Netherlands, Germany, and Italy; while milk volumes are lower in France.
Low milk prices are common across the EU countries. Isolated protests are occurring along with calls for political intervention to mitigate the problems of low milk prices. A European Dairy Commission Report is being released with ideas to stabilize dairy markets. Proposals to extend the PSA and Intervention programs have been given to the Council and will be presented to the European Parliament for its opinion. The Commission rejected a quota reduction, noting that production has been below the quota level in many countries and by more than 4% combined. There are discussions about a possible herd reduction plan and study of marketing sector pricing.
At the most recent Dairy Commission meeting on Thursday July 23, all subsidy levels were unchanged. Intervention and PSA stock numbers were not available from the Commission.
Traders and handlers continue to indicate that sales into international channels remain slow. Product prices remain at weak levels with limited changes. The slow recovery of the world economy is often the biggest obstacle in regaining export markets, despite export subsidies. Recent currency gains for the Euro against the U.S. Dollar are making EU exports more expensive.
EASTERN OVERVIEW: Eastern Europe milk production is often trending lower from the seasonal peak levels. Low milk prices are a big factor in the output drop. Cow slaughter rates are higher. Finished dairy products are available for market needs out of the region, yet face a slow world demand.
0930CT Butch.Speth@ams.usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JULY 9, 2009 (REPORT 27)
OCEANIA OVERVIEW:Milk production in New Zealand and Australia is at seasonal low levels as the winter season is well underway. Moisture during the winter months continues to be limited in most areas of both
countries. In Australia, a recent report from the Bureau of Meteorology indicates that an El Nino weather pattern is quickly emerging as a reality based on recent developments in climate indicators. The odds for El Nino, an abnormal warming of the eastern Pacific Ocean that creates havoc in weather patterns across eastern Australia, have risen significantly since two weeks ago, when the bureau said there was a more than 50% chance.
With the dairy industry of Australia basically centered in the Southeastern portion of the country, El Nino weather patterns will further add to the frustration of milk producers. Dairy producers and other agricultural enterprises in the region have been dealing with low and often limited moisture levels for many consecutive years. New Zealand milk producers and handlers are hopeful that this weather pattern will not impact them, but many state that this weather pattern has influenced weather conditions for them in the past.
Most major Australian dairy manufacturers have announce opening milk prices for the 2009 - 2010 season in the past week, bringing to reality the effects of the weakness in dairy export markets and the unwelcomed strength of the Australian dollar. Prices announced so far are between $0.25 - 0.28 per liter (in Australian dollars) down 35 - 38% from last year.
Oceania traders and handlers continue to voice their displeasure with export subsidies for the U.S. and Europe as the DEIP program was again announced in the states and additional export subsidy adjustments are anticipated out of Europe. Traders state that these assistance programs will only further delay possible market recovery for dairy producers and the industry. Prices for manufactured dairy products in the Oceania region are generally holding steady, although a firm undertone prevails. At the recent global/Dairy trade event for whole milk powder, the average price of $1829 per MT was down 3%. Prices for near term shipments (September) were down 8% averaging $1841, Oct - Dec shipments $1806 (-4.6%), and Jan- Mar shipments $1849 (+1.9%) when compared to the previous trading session.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. July 9, 2009 (REPORT 27)
WESTERN OVERVIEW:Milk production in Western European continues to decline seasonally. In some areas, hot and humid weather patterns spurred the decline, but as temperatures moderated, this decline eased. Milk volumes are mixed when compared to last year at this time. Reports for Germany and Italy indicate that volumes are
running ahead of last season, France is steady, while Ireland and the UK are experiencing lighter volumes.
The major topic of discussion in Europe this week is the possibility of an extended intervention open period. As part of its ongoing efforts to help stabilize the European dairy market, the European Dairy Commission has proposed to extend the period for buying butter and skimmed milk powder into public intervention. Typically, the season is open from March through August and now the commission is proposing to extend the period of intervention until the end
of February 2010 or the entire year. They are also proposing that it should be authorized, if the market situation so
requires, to extend it further until the end of February 2011. At this point, this is a proposal that needs approval by a higher authority, but most within the industry feel that the proposal will be approved.
At the most recent Dairy Commission meeting on Thursday July 9, all subsidy levels were unchanged. Skim milk powder continues to clear to intervention and now these stocks total nearly 230,000 MT with butter intervention totals nearing 82,000 MT. Traders and handlers of manufactured dairy products continue to indicate that international buyer interest remains slow with most sales activity centered around an internal need.
EASTERN OVERVIEW:Milk output in Eastern Europe is near or at seasonally high levels with some milk handlers indicating that receipts are starting to trend lower. Overall milk production is running higher than last season in Poland, while basically elsewhere is behind last season. Economics of milk production and low pay
prices are two factors being attributed for production to be lighter in many countries of the region. Stocks are available for immediate and future buyer interest. At this time, sales are limited.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JUNE 25, 2009 (REPORT 25)
OCEANIA OVERVIEW: Milk production in the Oceania region is holding steady at seasonally low levels. Milk handlers and producers indicate that the winter season is basically typical for this time of the year.
In New Zealand, temperatures are reported to be cold, but are at projected levels. Most all manufacturing plants are shuttered for the season and winter maintenance is occurring. Annual milk output is projected to be 7.5% ahead of last year's drought impacted season.
In Australia, winter weather patterns are occurring with cold nights and warmer days. Although moisture has fallen in most regions, many are still well short of desired levels for this time of the season and for future needs. In some instances, reports indicate that water levels are lower than last year at this time.
International buyer interest is reported to be limited from Oceania traders. Some Oceania traders are indicating that a recent international powder tender is causing interest for some, especially if they can source product from other areas of the world for near term deliveries. Oceania traders state that they may be able to participate in the tender if deliveries can be delayed until later in the calendar year when milk production resumes.
Most Oceania traders continue to indicate how they are and will be at a disadvantage when it comes to international sales activity as long as European subsidies and the U.S. DEIP program are in place. They also state that with these types of marketing assistance programs in place in Europe and the U.S., it will only delay recovery in domestic and international dairy markets worldwide.
Oceania milk producers are awaiting announcements by their milk coops and handlers of upcoming milk prices. They are projecting that prices will be higher than February adjusted prices, but will be below opening prices of last season. Some will be announcing these prices soon, while others will hold off announcing theirs until they have additional market information and will be able to announce a price that will hopefully not have to be adjusted during the season as they were during the 2008 - 2009 season.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. June 25, 2009 (REPORT 25)
WESTERN OVERVIEW: Milk production in Western European areas is now on the downside of the season. Lighter milk volumes are now relieving pressure on driers and milk processors are able to better manage the volumes and generate product of most need or best return. Cream supplies have tightened which is typical for this time of the season, thus milk volumes, when available, are clearing to skim
powder production with cream being a marketable product.
Sales activity is fair for this time of the season with most activity centered around internal demand. A recently announced tender for various manufactured dairy products is on the table at this time with bids forwarded within recent days. European traders and handlers are hopeful that they will be successful bidders in the process, especially when looking at the near term delivery dates which put some potential bidders out of the market.
The EU Management Committee met last week and increased common export subsidies for skim milk powder by 18 Euros to 228 per MT and whole milk powder by 40 Euros to 350 per MT. Butter and cheese common refunds were unchanged. Under the tendering system 82% butter offers received a 700 Euro per MT subsidy, butteroil 845 Euros, and skim milk powder 240 Euros.
Clearances to intervention continue to occur for both skim milk powder and butter, although butter offerings are slowing. Intervention totals for skim milk powder total nearly 203,000 MT and butter slightly more than 81,230 MT. Conversations and lobbying among dairy producers, manufacturers, and dairy traders are to extend the intervention program beyond the program deadline close of August 31. Many feel that if the program was continued beyond the scheduled close, it would help protect the internal market. The possible extension of the intervention program is a decision that is not within the Dairy Commissions control and would need approval from a higher authority. A possible consideration would be a year around program. As of June 14, PSA butter totals equal nearly 97,000MT.
EASTERN OVERVIEW: Milk output across most of Eastern Europe is moving higher seasonally and reports indicate that volumes are higher than last year at this time. Although economics of milk production are challenging to most producers, increased quota is probably the momentum behind this trend. Stocks of manufactured dairy products are building and traders and handlers are hopeful that sales activity, especially international, will soon expand.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JUNE 11, 2009 (REPORT 23))
OCEANIA OVERVIEW:
The NZ milk production season is winding down. Seasonal weather conditions have stifled the milk output and remaining cows are being dried up. Current output is mainly being for the carryover or fresh product needs. Totals are running 7.5% ahead of last year's drought affected output and around 2-3% above levels of two seasons ago. Dairy products are mostly committed for the season.
Heavy rains and flooding in Australia have impacted parts of the dairy regions with over 120 dairy farms affected. Milk output in Australia is moving seasonally lower at levels similar to last year at this time. April output totaled 2.2% higher than a year earlier with seasonal production through April also tracking 2.2% higher. The majority of the current output is being utilized for local markets. Opening milk prices for the new season beginning in July are expected to be lower when announced. Dairy product sales and inventories are being adjusted due to the end of coops and other firms' fiscal years at the end of June. Currency valuations are creating more costs in exporting dairy products and hurting returns.
Butter prices are steady to lower. Export sales have slowed as most products have been committed. Buying interest has been light as both the EU and the U.S. have export subsidies in place. On June 8, the U.S. DEIP announced bonuses for butter at $450 US and for anhydrous milkfat, butteroil, and ghee at $650 US per MT. World butterfat interest is often subdued with the subsidies available.
Skim milk powder pricing is unchanged. The market export subsidies in the EU were increased and U.S. DEIP NDM sales were announced, creating more market tension. Supplies are mostly committed in the Oceania region with demand decent for offerings. Current drying schedules have moved lighter to match the milk supplies.
The whole milk powder markets are weaker and somewhat messy. Recent pricing strength has been erased by recent events within the region and globally. The results of the most recent global DairyTrade auction were pegging WMP at levels 12% below the previous auction. The available offerings from the region are limited. Increases in EU export subsidies also factor in.
Cheese prices are mostly steady. With most product committed, there is limited business left to transact. Most customers are covered forward; although there is limited demand on the global front. Product is moving well to traditional customers.
0930CT butch.speth@ams.usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. June 11, 2009 (REPORT 23)
WESTERN OVERVIEW: Milk production is building seasonally in Western Europe as the season progresses. Weather has not been a factor for most areas. There are more reports on the impact of lower milk prices. Farmers are assessing what options are available to counter the milk prices. Lower intakes are noted in France, whereas German output is stronger than a year ago.
The EU Management Committee meet last week and increased most export subsidies. The following are the current levels in Euros per MT with changes: SMP 210, +20; WMP 310, +20; Butter 650, +100; Butteroil, 787, +121; and cheese 198.4, no change.
In the U.S., DEIP export bonuses were announced at $450US/MT for butter and at $650US/MT for butteroil, anhydrous milkfat and ghee. The stronger Euro is working against export opportunities. Butter movements into intervention were 2300 MT in the last two weeks with stocks totaling over 79,600 MT. PSA stocks also increased and top 89,000 MT. SMP intervention levels increased by 22,688 MT over the last two weeks and now total nearly 184,000 MT.
Exports sales are slow for most products. World demand is slow with some opportunities noted. Whey is the current exception, as demand and pricing levels have increased. Many buyers are taking a wait and see approach, especially when seeing world stock levels and unsettled prices.
EASTERN OVERVIEW: Milk output across most of Eastern Europe is moving higher seasonally. There are reports that Poland output was +9% over a year ago in April. The trend continues. Milk is being handled well in the region. Demand for finished dairy products is steady to lighter with stock available.
0952CT butch.speth@ams.usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. May 28, 2009 (REPORT 21)
OCEANIA OVERVIEW: Traders and handlers of dairy products in Oceania are not pleased with the recent announcement out of the U.S. which re-activated the Dairy Export Incentive Program (DEIP) that has been idle since 2004. The last bonuses awarded under the DEIP program occurred in early 2004 although the program was activated during the fiscal year July 2005 - June 2006 with no activity. Traders indicate that with this program and European Export Subsidies for
various dairy products, recovery within international dairy markets will be further delayed, thus ultimately delaying
recovery for dairy farmers. Oceania traders and handlers also state that these export assistance programs continue to put them at an international participation disadvantage as both New Zealand and Australia do not have any type of export assistance programs.
Milk production in both Australia and New Zealand is basically finished for the current season. New Zealand's output is projected to be about 7 1/2% ahead of last season by the end of the fiscal year. In Australia, output is projected to be flat to slightly higher than last year on a cumulative basis. New Zealand was experiencing a good fall in recent weeks, but in recent days a premature cold snap basically brought the milk production season to an abrupt end.
In Australia, fall weather patterns have been favorable with some areas receiving much needed moisture, while others are experiencing flooding conditions.
The largest milk co-op in New Zealand announced a forecast payout price to its' producers to be 12.5% lower ($4.55 for each kilogram of milk solids), down from the current season's payment of $5.20. The forecast for the 2010 season was lower than expected because of the recent strengthening of the New Zealand dollar against the U.S. dollar, which reduces export earnings.
Other milk producers and handlers within the Oceania region indicate that this is not the direction that is needed to encourage milk production and will take millions of dollars out of the economy.
Traders and handlers state that sales activity is quiet, although product does continue to clear Oceania shores that was previously negotiated. Some traders indicate that some Q3 and Q4 buyer interest is starting to develop, although most are not willing to lock into commitments at this time due to the unsettledness of the market.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. May 28, 2009 (REPORT 21)
WESTERN OVERVIEW: Milk production continues to increase seasonally throughout most European countries. Reports are mixed as to how output compares to last year. In Germany, output is running stronger than last season and is past peak levels. In France, output is also at or slightly past peak levels, but trails last year at this time. Last year, France experienced a very strong start to the season which did not occur this year. In Ireland, rainfall has been very prevalent in the country which is causing pastures to be soaked, thus not good for grazing and subsequently milk output.
Europeans are voicing various comments following the DEIP announcement out of the U.S. last week. Basically, comments indicate that this adds another dynamic to an already challenged international market. During the most recent Management Committee meeting last week and before the DEIP announcement, all export subsidy levels were unchanged. The Committee issues export refunds under the tendering system for 2,892 MT of butter, 485 MT of butteroil, and 9,650 MT of skim milk powder.
Intervention stock levels continue to grow and now stand at 77,360 MT of butter and 161,233 MT of skim milk powder. Both of these levels are well above the maximum levels (30,000 MT of butter and 109,000 MT of skim milk powder) that were allowable and received fully restitution. Subsequent offerings into intervention are being accepted but at reduced restitution levels. PSA totals for butter are over 83,000 MT.
Trader and handler indicate that international buyer interest is quiet. Although sales continue to be reported, most transactions are for limited or near term volumes. A very strong Euro against the U.S. dollar is putting upward pressure on European prices.
EASTERN OVERVIEW: Milk production in Eastern Europe continues to build seasonally and often lags Western counterparts by 4 - 6 weeks. Milk producers and handlers indicate that the season is developing quite well and currently project that the positive season will continue. At this point, traders and handlers are not reporting significant sales activity, but indicate that stocks are building and available for potential buyer interest.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. May 14, 2009 (REPORT 19)
OCEANIA OVERVIEW: Milk production in Oceania continues to wind down. In New Zealand, milk handlers are projecting annual volumes to be running around 7.5% ahead of last season. Sustained growth late in the production year is helping provide a positive end to the final few months.
In Australia, March production figures indicate that output for the month was 0.6% above March 2008 with cumulative totals for the first nine months of the year up 2.2%. This nine month cumulative figure is stronger than most had anticipated, but many also state that during the final three months of the year, milk volumes could drop quite sharply and earlier projections of flat to slightly higher output in the 2008 - 2009 season could still be the final result.
Traders and handlers indicate that sales activity out of Oceania is minimal. In most instances, shipments of previously contracted volumes continue to clear Oceania shores, but no significant new business is being reported. Stocks of Oceania product are in close balance with needs and minimal, if any, stock is available for spot buyer interest.
During the most recent round of trading on the globalDairy Trade platform for whole milk powder, the strength of the past two months subsided and end of trading results indicated that the average price over the three contracting periods was $2144 per MT which was 4.1% lower. The near term contract was slightly higher, but Aug-Oct and Nov-Jan contracts were substantially lower.
Milk producers in both New Zealand and Australia are trying to figure out how to end the current season and prepare themselves and their dairy operations for the start of the new season. During the current season, late season reductions in payout prices to producers significantly impacted end of season milk checks and projections for opening farm gate prices in the new season are anticipated to not be much more favorable.
0930 CT steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. May 14, 2009 (REPORT 19)
WESTERN OVERVIEW: Milk production continues to increase seasonally throughout Europe, although many milk handlers indicate that milk volumes appear to be trailing last year at this time. Last year, milk production experienced a strong start to the season with this year's start not as positive. Early reports indicate that January and February milk volumes this year were nearly 3% lower than last year.
Traders and handlers state that buyer interest is starting to improve. Much of this renewed buyer interest is due to limited stock within the international marketplace and European prices are becoming more competitive. Much of this is due to recently re-activated export subsidies.
On Thursday May 7, it was announced that the common or list refund for EU export subsidies will again remain unchanged: skim milk powder 190 Euros per MT, whole milk powder 290 Euros, butter 550 Euros, butteroil 666 Euros, and cheese 198.4 Euros.
Under the tendering system, around 12,000 MT of skim milk powder were bid with awards of nearly 11,000 MT of this volume at a maximum of 220 Euros per MT; (two weeks ago, corrected figures for skim milk powder under the buying in system should have read around 16,000 MT were bid with slightly less than 15,000 MT receiving awards at stated values); butter, 7,487 MT bid, 3,762 MT receiving awards at a maximum of 600 Euros per MT; and butteroil, bids totaled around 1,600 MT, awards of about 1,100 MT at a maximum of 730 per MT.
Maximum levels of intervention for both butter (30,000 MT) and skim milk powder (109,000 MT) have been attained, thus subsequent offerings are now being accepted under a buying in tendering system. The most recent figures for intervention totals have butter around 69,000 - 70,000 MT and skim milk powder near 140,000 MT. The most recent intervention tender value for skim milk powder is 1684 Euros per MT which is 14 Euros less than full intervention value. PSA totals for butter are near 78,000 MT.
EASTERN OVERVIEW: Milk production increases are slowly starting, although significant increases are still a few weeks away. Traders and handlers report that they have basically cleared most all of their inventory from last season and feel that they are in a good position to begin the new milk production season. Traders are optimistic about the upcoming season, especially with the buyer inquiries that they are currently receiving.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 30, 2009 (REPORT 17)
OCEANIA OVERVIEW: The Oceania milk season continues to wind down. Current milk receipts are being directed toward consumer items, products with the best international interest, and those in the tighter supply position. International interest is improving though many customers are still just covering shorter term needs but making some longer commitments as financing allows. For many customers, not having adequate financing is what seems to be slowing sales now that prices are recovering from recent lows.
In New Zealand, the current forecast continues for milk volumes to end the current season around 6% above last season's drought reduced output. Producers are drying off cows seasonally. Efforts continue to finish current export sales and get them booked and
shipped before the new season begins.
Recent rains in Australia have lifted the mood and allowed for a solid start to the planting of fall crops, particularly grains. Some areas continue to remain dry though conditions are green. Much more rain is needed to replenish depleted streams and reservoirs. Producers
are very interested in the opening milk prices for the upcoming season in order to make plans for the new season.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 30, 2009 (REPORT 17)
WESTERN OVERVIEW: Milk intakes continue to increase seasonally in Europe with annual peak receipts expected in a few weeks. Manufacturing schedules remain active to handle the milk receipts. Some EU countries' output continues to lag year ago levels as a reaction to lower producer milk prices. Export interest remains light though some additional interest is noted for whey as an alternative to U.S. sourced product.
On Thursday April 23, it was announced that the common or list refund for EU export subsidies will again remain unchanged: skim milk powder 190 Euros per MT, whole milk powder 290 Euros, butter 550 Euros, butteroil 666 Euros, and cheese 198.4 Euros. Under the tendering system around 1,600 MT of skim milk powder were bid with awards of slightly less than 1,500 MT of this volume at a maximum of 220 Euros per MT; butter, 9,061 MT bid, 4,866 MT receiving awards at a maximum of 600 Euros per MT; and butteroil, bids totaled around 1,900 MT, awards of about 1,600 MT at a maximum of 730 per MT. Maximum levels of intervention for both butter (30,000 MT) and skim milk powder (109,000 MT) have now been attained, thus subsequent offerings are now being accepted under a tendering system. Butter intervention totals now total over 61,000 MT. During the past two weeks, nearly 10,000 MT of butter were received under the tendering system. Since maximum intervention levels of skim milk powder were attained last week, 10,511 MT of additional skim milk powder were accepted into intervention at 1689 Euros per MT, which is 9 Euros lower than full intervention value. PSA
totals for butter are near 72,200 MT.
EASTERN OVERVIEW: News out of Eastern Europe remains limited. Milk receipts are increasing seasonally though lagging Western Europe as usual. Little new export interest is noted. Most of the product being exported continues to come out of inventory.
0930c George Koerner 608-250-3205 and Steve Schneeberger 608-250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 16, 2009 (REPORT 15)
OCEANIA OVERVIEW: Seasonal declines in milk output continue as the milk producing season winds down. The autumn season has been favorable weather. Economic conditions in local economies are affecting milk production. Unsettled world conditions, currency valuations, and credit availabilities, all play out as demand factors for exporting and contracting for future exports. Farm milk prices will likely hold through the season. Milk pricing values for next season remain a big concern.
Australian milk figures for February are adjusting lower and the seasonal totals are projected to come in at around the same level as the prior season. Early season gains are being erased by later season declines. New Zealand milk flow is trending lower. The milk year totals YTD indicate around a 5% increase over the prior year with the heaviest gains noted early in the year with current numbers declining as the year progresses. Prices for manufactured dairy products are steady to slightly higher. Most products have been contracted or are being held for expected business in coming months.
0950 CT Butch.Speth@usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 16, 2009 (REPORT 15)
WESTERN OVERVIEW: Milk production is moving along at expected levels across Western Europe with most countries at or near year ago levels. Declining pay prices have had a great influence on the milk flow which has most countries at or below expected and quota levels.
On Wednesday April 8, it was announced that the common or list refund for EU export subsidies will remain unchanged: Skim milk powder
190 Euros per MT, whole milk powder 290 Euros, butter 550 Euros, butteroil 666 Euros, and cheese 198.4 Euros.
Under the tendering system, 16,748 MT of skim milk powder were bid with awards of 13,398 MT of this volume at a maximum of 220 Euros per MT; butter, 10,516 MT bid, 4,816 MT receiving awards at a maximum of 600 Euros per MT; and butteroil, bids totaled 1,174 MT, awards of 632 MT at a maximum of 730 per MT. Maximum levels of intervention for butter (30,000 MT) were quickly filled during the early days of the open season thus subsequent offerings are being accepted under a tendering system. Butter intervention totals, as of April 3 are around 51,300 MT. Skim milk powder offerings now total around 97,350 MT with maximum levels that would receive fully restitution totaling 109,000 MT. PSA totals for butter are near 68,500 MT.
Overall, export sales are slow. The general weak world economy is a major factor with the buying power of importing countries greatly impacted and lower than a year ago. Often, and especially without subsidies, pricing out of Europe is higher than Oceania.
EASTERN OVERVIEW: Little new news has developed out of Eastern Europe affecting the milk and dairy product markets. Milk production is steady to increasing slightly as the milk season begins to build. Sales of dairy products are fair at best with sales of stored product more likely to move than currently produced products.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. April 2, 2009 (REPORT 13)
OCEANIA OVERVIEW: The Oceania milk production season continues to decline. Milk producers and handlers anticipate that the current season might end a bit sooner than recent years due to the economics of milk production. At this point, milk handlers project that output in New Zealand will end the season between 4 - 5% ahead of last seasons' drought affected year, while Australian output will be comparable to last year's volumes.
Manufactured dairy products prices adjusted higher and lower during the past two weeks. The strength of prices that was developing a few weeks ago has subsided, and in instances, prices have retracted. In most instances, Oceania stocks from the current milk production season have now been committed. During the past 2 - 4 weeks, buyers have returned to the marketplace and have absorbed uncommitted stocks.
Trader and handlers state that they are in a much better supply/demand situation than they were 6 - 8 weeks ago. Oceania and international buyers are closely monitoring the most recent round of trading for whole milk powder within the globalDairytrade event which occurred on Wednesday, April 1. At this event, the average price covering all shipment periods averaged $2235 per MT up by 3.5% from last month.
Traders were very interested to see price levels for the final quarter of 2009 to average $2254/MT, with the July - September price averaging $2322/MT. In the final quarter of 2009, Oceania handlers and traders feel that overall prices for manufactured dairy products will remain in a narrow range of current levels for the foreseeable future.
Milk production in Europe and the U.S. is starting to increase seasonally, thus the outlook for supplies on the world market are still unclear. European manufacturers and handlers are still trying to clear last season's production before they get too far into the new season, although buyer interest remains slow and unaggressive. Even with re-activated subsidies, sales are slower than desired from that region.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. April 2, 2009 (REPORT 13)
WESTERN OVERVIEW: The EU milk quota year end arrived on March 31 and for the most part, all countries were able to maintain production within quota levels. Three or four countries were above previous year levels, although these overages were smaller than in recent years. One report, accounting for total EU milk production for the first 11 months of the quota year, indicated that milk output was running 0.6% ahead of last season, within quota levels. Milk producers and handlers stated that much of this growth occurred during the first half of the year when milk prices and the dairy economy were favorable.
Within recent months, growth has slowed greatly, thus many project the 12 month figure to be close to last year levels. For the new milk production year, quotas will be increased by 1% with the milk quota system expiring by 2014/15. Export subsidies remain unchanged from the most recent announcement and will possibly be adjusted next week (April 9) when the commission considers adjustments. No new figures as far as butter volumes received under traders and handlers are reporting that over 80,000MT of skim milk powder have cleared to intervention through the end of March. Offerings are quickly nearing maximum levels of 109,000MT.
Traders and handlers speculate that a tendering system will also be implemented once the maximum level has been attained. Overall milk production in Europe is starting to show more signs of increases in various countries. Last year, France experienced a very strong start to the season in January/February, but this trend moderated this year and output growth is more in line with typical years.
Stocks of manufactured dairy products from last season continue to be worked down and suppliers and handlers are getting more comfortable with their carryover supply situation versus a few months ago. Although subsides are in place to potentially help with product sales, traders and handlers continue to indicate that sales activity remains slow and unaggressive.
EASTERN OVERVIEW: The milk quota year end for Eastern European EU countries is now past. The March 31 year end date has most Eastern EU countries within quota levels. Current milk production increases in this region are very minimal as the start of the new production season is still 2 - 4 weeks away. No significant sales activity is being reported out of this region with small lot sales occurring.
Manufacturers and handlers state that carryover stocks from last season are still available, but are declining. Most are hopeful that buyer interest will resume soon to clear these volumes out before new stocks are generated.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. March 19, 2009 (REPORT 11)
OCEANIA OVERVIEW: Milk production continues to seasonally decline in the Oceania region. In New Zealand, milk handlers are
projecting that seasonal output will be ahead of last season's drought influenced output by 3 - 4%.
In Australia, positive milk production projections earlier in the season are now being adjusted lower and milk handlers and producers are now projecting that output will be closer to balanced with last season. Within the past few weeks, official milk production figures for the first seven months of the year (July - January) were released which indicated that output was running 5.5% ahead of the previous year. Milk producers and handlers feel that this positive figure will quickly disappear during February when record setting temperatures were recorded which negatively influenced production trends. Many state that these hot temperatures quickly knocked steady declines in output without recovery. Temperatures have moderated and recovery is not occurring to any great extent.
In the past 4 - 6 weeks, many Oceania manufacturers and handlers were quite concerned about their supply/demand imbalance, but in
recent weeks, this imbalance has become more manageable. In many instances, Oceania suppliers and handlers indicate that they are
comfortable with their end of the season outlook. Traders and handlers state that buyers are returning to the market place as many need stock, but also realize that prices are steady to slightly firmer. Traders state that they are pleased that buyer interest is resuming, but are also aware that currency issues and availability of cash to purchase will be factors that will limit potential sales for coming months.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. March 19, 2009 (REPORT 11)
WESTERN OVERVIEW: For the fourth round of subsidy levels announced on Thursday, March 19, refund levels were again unchanged. Common or list refunds, in Euros per MT are: skim milk powder 190; whole milk powder 290; butter 550; butter oil 666; and cheese 198.4. Under the tendering system, 14,660 MT of skim powder were awarded at a maximum of 220 Euros per ton; 5,520 MT of butter received awards at a maximum of 600 Euros per ton; and 787 MT of AMF received awards at a maximum of 730 Euros per ton.
Traders and handlers continue to indicate that the refunds are not impacting export sales to any great extent. Maximum intervention levels (30,000 mt) of butter were quickly filled in the early days of the open season. Now that the maximum level has been attained, a tendering system is in place to accept additional volumes. At the European Dairy Commission meeting on March 19, tendering volumes of 6,665 MT were accepted into intervention. Skim milk powder offerings into intervention continue and as of March 16 total over 55,000 MT which is more than half of the maximum level of 109,000 MT. PSA totals for butter through March 8 total 56,142 MT. This year, PSA for butter has been open since January, two months earlier than usual, thus a figure of 11,672 MT last year at this time is not comparable but gives a benchmark figure for informational purposes. Producers and handlers stated that PSA offerings slowed during February as butter was being readied for intervention offering on March 1, but now will probably pick back up as intervention is full and a tendering system is now in place.
The European milk production quota season will be ending at the end of March. With the increased quota announced last year, a few countries appear to be above quota levels, although not as significant as in recent years. For most countries, they will be within quota levels, but are closely monitoring their milk marketings as the quota year end nears. Current economics of dairy production potentially will have a significant impact on future output for many European dairy producers.
Traders and handlers continue to report that sales activity remains slow and unaggressive, although whole milk sales are stronger. Reports indicate that buyers are returning to the market place and at least questioning supply availability and price levels. European traders and handlers feel that these inquiries will continue to increase as buyers realize that international supplies in other markets are no longer available. Late in the week, a sharply higher Euro against the U.S. dollar is causing unsettledness in dairy markets. Traders speculate that the Euro may reach 1.40 by week's end.
EASTERN OVERVIEW: The winter season is still at hand in Eastern Europe, thus no signs of seasonal increase are being reported as of yet. This region is typically 4 - 6 weeks behind their Western counterparts. At this point, the winter season has been very typical,
thus producers are anticipating that the new season will resume as expected. Economics of production are a major concern for Eastern
European producers as well. It is still too early in the season to project how many of the producers will respond to current and future
conditions, but the overall feeling is that milk volumes will be lower.
0930c steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. March 5, 2009 (REPORT 09)
OCEANIA OVERVIEW: Seasonal, declining trends in milk production are common in the Oceania region. Recent trends continue with
hot weather an influencing factor. New Zealand's milk output is outpacing last year's drought influenced levels at around 4-5% with a more typical seasonal end expected. Some localized areas are seeing higher output levels versus last year. Most contracts are working out for any remaining finished dairy products. Customer interest has picked up with buyers sensing the need to secure products and realizing that current prices are workable.
Whole milk powder markets are firming. At the Global Dairy Trade, WMP prices moved higher for May contracts, with regular WMP price at $2100. Prices for SMP are steady to higher as more product is committed and the production season winds down. Cheese prices are steady, but demand is impacted by the world economic downturn and general lack of interest. Farm level, pay prices for milk have been lowered from earlier season prices. The impacts of lower dairy product prices have necessitated processors to lower the prices paid to the dairies - some have seen a 25% decline in February. Nearing the end of the milk season, the lower prices will have less of an impact on macro production issues. In Australia, conditions are milder over the past few weeks. There has been little if any precipitation.
Forecasted heat and winds will again present the possibilities of bush fires. Milk output is declining seasonally with some farms drying up cows.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. March 5, 2009 (REPORT 09)
WESTERN OVERVIEW: For the third round of subsidy levels announced on Thursday, March 5, refund pricing levels were unchanged. Common or list refunds, in Euros per metric ton, were: for skim milk powder 190; whole milk powder 290; butter 550; butter oil 666; and cheese
198.4. Under the tendering system, 14,814 metric tons of skim powder were bid with 3,000 metric tons receiving an award at a maximum of 220
Euros per ton; 10,800 tons of butter were bid with 1,828 tons receiving a maximum of 600 Euros per ton; and AMF bids totaled 1,000 tons with 48 tons receiving an award of a maximum of 730 Euros per ton.
Traders and handlers continue to indicate that the refunds are not impacting export sales to any great extent. Butter offerings into intervention were 28,000 MT of a possible 30,000 MT as soon as the March 1 opening with indications that the total was filled by late week. SMP offerings into intervention were over 40,000 MT of the 109,000 MT possible. Offerings are heavy because product made after February 1 could be put into the system. PSA clearances have nearly ceased in the interim. Buying interest is slow for local and export accounts. Whole milk powder offerings are lower, but not clearing into export channels. Output has been slower, in favor of SMP/butter. Milk production is following recent trends in the EU. The indicated production increase is expected to be around 1%. Farm prices are being lowered to reflect lower finished product sales and more unrest at the farm level is noted.
EASTERN OVERVIEW: The general tone of the milk production status in the region is best indicated at steady with the recent period. As the winter season nears an end, milk production levels are expected to build. Low milk prices are expected to have impacts on Eastern
European countries as lower price trends for manufactured dairy products continue. Finished dairy products are available at normal volumes.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. FEBRUARY 19, 2009 (REPORT 07)
OCEANIA OVERVIEW: Milk production in the Oceania region continues to decline. Production estimates continue to be adjusted lower. In New Zealand, current annual production estimates are running 4 - 5% over last season with Australian estimates settling in the 1% above last season range. During the past two weeks, record setting temperatures in both Australia and New Zealand will have the potential to accelerate the decline. At this point, milk handlers are not reporting any significant impact, but do acknowledge that receipts at some facilities are lower. Although the temperatures have been hot, contacts indicate that this is the summer season and this has been and is a good run of summer weather. As of February 1, pay out prices for milk have basically been cut across the board in both countries.
Producers are not pleased with the adjustments, but also acknowledge that a large percentage of their annual output was generated at higher levels, thus lower milk volumes at this time of the season will garner the lower prices. Many producers are trying to figure out what will be the best way to conclude this season and prepare for next season.
Some are considering drying off the herd earlier than usual. In Australia, the bush fires of the past few weeks in Victoria have
impacted about 50 farms. Three farm houses were lost with about 70 cows or heifers lost and another 30 still under vet care. The major fire impact for dairy farmers was from loss of hundreds of hectares of pasture, some fodder, and damage to fence rows. Some manufacturing facilities in the fire affected areas were shuttered for a few days due to excessive smoke in the area with milk being rerouted to other facilities. Reports of under control fires continue to occur and conditions are stable for the dairy industry. Traders and handlers of manufactured dairy products are indicating that buyer inquiry is increasing. Additional spot sales are occurring with no significant sales being reported at this time. Traders and handlers indicate that buyers are fully aware that current price levels are not sustainable, thus many are feeling that a floor might be at hand. Suppliers state that price increases might be in the near future, especially if stocks continue to clear Oceania shores. With renewed buyer interest, many Oceania suppliers are not as concerned about uncommitted stocks as they were a few weeks ago.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. FEBRUARY 19, 2009 (REPORT 07)
WESTERN OVERVIEW: A second round of subsidy levels were announced on Thursday, February 19. The common or list refunds, in Euros per metric ton and percentage change from the previous subsidy are: skim milk powder 190, +12%; whole milk powder 290, +12%; butter 550, +22%; butter oil 666, +22%; and cheese 198.4, unchanged. Under the tendering system, 18,000 metric tons of skim powder were bid with 5,863 metric tons receiving an award at a maximum of 219.8 Euros per ton; 13,800 tons of butter were bid with 2,884 tons receiving a maximum of 600 Euros per ton; and AMF bids totaled 1,840 tons with 133 tons receiving an award of a maximum of 730 Euros per ton. Traders and handlers continue to indicate that the first round of subsidy announcements has not had a significant impact on sales up to this point. Production of butter and skim milk powder continues, with much of this output potentially headed to intervention which opens on March 1. Manufacturers and handlers still anticipate that clearances, especially butter, will be heavy early on in the open season. Maximum levels of butter are 30,000 metric tons with skim powder being 109,000 metric tons. In years past, when intervention maximum levels were attained, a tendering system was introduced to accept additional volumes. Consideration for this to happen again will be addressed by the Commission if the situation arises. Clearances of butter to PSA are reported to have slowed. Traders and handlers continue to indicate that stock from last season is still available.
Manufacturers and handlers are trying to clear these volumes before the new production season resumes. International buyer interest remains slow and unaggressive. Traders feel that buyers are once again holding back with their purchases until the most recent round of export subsidies are factored into price quotations.
EASTERN OVERVIEW: Winter weather conditions continue to prevail in most Eastern European countries, thus noticeable seasonal milk increases are still 6 - 8 weeks away. Traders and handlers continue to market stock that remains from last production season. For those traders and handlers that are part of the EU 27, recently announced export subsidies are having little impact on sales activity. Often, including export subsidies with price quotations, European supplies are still not price competitive.
1100C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. FEBRUARY 5, 2009 (REPORT 05)
OCEANIA OVERVIEW: Milk production in the Oceania region continues to edge lower. In both New Zealand and Australia, milk handlers are concerned about how the season will end. February 1 has arrived and lower payout prices across most all areas are now in effect. Within the past four to six weeks, most all milk buyers have adjusted their payout prices by as much as 25% lower. These adjustments are significant for most producers, although milk production is on the down side and will basically reflect a 10 - 12% annual reduction in price when factoring in first half positive prices when volumes were the heaviest.
Although lower prices this year are a major adjustment for most farmers, next production season will be even harder to adjust to. This is a major topic of discussion at this time and could impact current end of season milk volumes. Milk producers will be making decisions during the next few weeks as to how they will wind down the 2008 - 2009 season and prepare for the 2009 - 2010 season. One consideration is to dry off the cows earlier than usual to reduce costly supplemental feed cost. Climatic conditions could also impact late season milk volumes.
In New Zealand, varying temperatures and moisture levels could impact milk output quite quickly. In Australia, over most of the dairy region, record setting temperatures, reaching 45 degree C (113 degree F) occurred for a number of days over the past week. Although these record setting levels have moderated, the impact on the milking herd is still unknown. Milk handlers feel that some production will recover, but most feel that these conditions may accelerate an earlier season's end. Early season production projects of an 8% increase over last season in New Zealand are being replaced with a 4 - 5% increase and recent projections of a 1 - 2% increase in Australia are now reverting back to a 1% gain over last year.
Climatic and economic conditions will be major factors in late season milk production trends in Oceania. Market conditions in the Oceania region are little changed from recent weeks. Oceania traders and handlers continue to voice their concern about the re-activation of export subsidies in the EU and the possibility of the DEIP program in the U.S. and how this will only prolong recovery for dairy producers and the industry.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. FEBRUARY 5, 2009 (REPORT 05)
WESTERN OVERVIEW: The topic of discussion in Europe and elsewhere in the world continues to center around the re-activation of export subsidies two weeks ago. European traders and handlers welcomed the subsidies in hopes of spurring international sales, but as of yet,
this has not happened.
Many traders indicate that the announced common or fixed refunds for some products are still not sufficient to compete internationally, especially for butter. Nearly doubling the current butter subsidy would get European butter in line with other international price quotes. Even with subsidy assistance, buyers continue to exercise caution with their purchases and often remain absent from the market place. As has been the case for quite some time, traders and handlers still feel that buyers anticipate lower prices so why should they purchase now.
The winter season is still at hand through most areas of Europe. Heavy snowfall in some areas, including the UK disrupted milk logistics during the week. Milk producers and handlers state that winter is still not over and February and March can be very challenging when it comes to weather patterns in the region. Usually in February, milk production starts to noticeably increase in some regions of Europe, but at this time, no reports are surfacing of this development.
Butter continues to clear to PSA, but butter for clearance to intervention still has a few days to go before it can start to be produced. Butter can only be produced for intervention offering 23 days before March 1 with skim milk powder being 28 days prior to March 1. Traders and handlers feel that offerings of both products may be heavy initially, especially for butter, as 30,000 MT of butter are accepted into intervention before maximum levels are attained. Skim milk volumes are larger and 109,000 MT are accepted until maximum levels are attained. Butter producers anticipate that PSA offerings will ease during the next few weeks as butter generated during the month can be offered to intervention at the beginning of next month.
Pay prices to dairy producers are declining in many parts of Europe which is causing many producers to seriously review their milking operations.
EASTERN OVERVIEW: Cold and snowy weather patterns in Eastern Europe are causing milk production to maintain low levels, although typical for this time of the season. Typically, Eastern Europe does not realize any significant production increase until mid to late March.
Traders and handlers continue to report stocks of various manufactured dairy products are available for domestic and international buyers.
At this point, international sales out of the region are minimal.
0930C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JANUARY 22, 2009 (REPORT 03)
OCEANIA OVERVIEW: The milk production season in the Oceania region continues to decline. At this point, declines appear to be gradual with no significant influence by unsettled weather patterns.
In New Zealand, milk volumes are lower and these declines are causing some milk producers and handlers to adjust their annual output projections. Early season projections of an 8% production increase over last season are now being replaced with a 2 - 3% gain. Carryover influences from last season's drought, dryer than usual conditions along the eastern part of the South Island, and general economic conditions for dairying are some of the factors contributing to the adjustments.
In Australia, preliminary December milk production estimates have volumes heavier than last season by 5%. These volumes will help overall annual production volumes, but milk producers and handlers are still maintaining a 1% growth projection for the 2008 - 2009 season. Recent
announcements of midseason step-downs in milk prices will provide little incentive for farmers to feed to support production in the
fall.
Manufacturers and handlers of dairy products continue to report slow sales activity. Traders and handlers are selling product, but
not at levels of previous years. In most instances, buyers are procuring stocks for near term or immediate needs only. Buyers
indicate that it is getting more difficult to read the market and are proceeding more cautiously with their purchasing strategies.
Some Oceania manufacturers continue to report that they are looking for warehouse space to accommodate uncommitted volumes. The recent
announcement out of Europe pertaining to the re-introduction of export subsidies and the concern about the possibility of the resumption of
the DEIP program in the U.S. have Oceania traders very concerned about sales opportunities for them. They state that they have already
lowered their prices considerably in hopes of attracting buyer interest and indicate that these export assistance programs will further cause challenges for them. The Oceania dairy industry is hopeful that the current weak trend in sales and prices would cease soon, but with these types of programs, they feel that a turn around in the situation will only be prolonged.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. JANUARY 22, 2009 (REPORT 03)
WESTERN OVERVIEW: The news out of Europe is the reactivation of export subsidies. Export subsidies have been suspended since June 2007. Subsidies would be reinstated for various dairy products via a series of regular tenders and trade bids. At the Dairy Commission meeting on Thursday, 22 January, the commission announced the various subsidy levels.
There are two types of subsidies: a tender refund which is variable and list or common refund which is fixed. The common or list refunds, in Euros per metric ton, are: skim milk powder 170; whole milk powder 260; butter 450; butter oil 544.9; and cheese 198.4. Under the tendering system, 15,000 MT of skim milk powder were bid and 5,600 MT were awarded with subsidies as high as 200 Euros per MT. Total butter bids were 9,500 MT and 2,300 MT were awarded with subsidies as high as 500 Euros per MT and butter oil bids totaled 580 MT and 80 MT were awarded with subsidies as high as 580 Euros per MT.
Traders are hopeful that subsidy opportunities will allow them to once again become more active in international trade. Up to this point, sales activities have been minimal as European prices were generally higher than other international competition price levels.
Although European prices have been firm, higher prices are not the only factors limiting sales activity. Current economic conditions
around the world are also a limiting factor. Buyers are being very selective in their purchases and are proceeding very cautiously. Milk
production is seasonally low, although manufacturing of various dairy products continues. Reports indicate that butter production is
occurring with a good portion of current production clearing to PSA.
No official figures have been released as to the total volumes offered into the program as of yet. Butter producers anticipate that PSA
offerings will ease during February as butter generated during the month can be offered to intervention on March 1. Manufacturers and
handlers continue to feel that maximum intervention volumes of 30,000 MT will quickly be filled during the early days of the open season.
Intervention of skim milk powder will also open on March 1 with maximum levels of 109,000 MT. Traders and handlers speculate and are
hopeful that a tendering system will be introduced to accept additional volumes into intervention once maximum levels have been
attained.
EASTERN OVERVIEW: Milk production in Eastern Europe remains seasonally low. Manufacturers and handlers indicate that sales
activity remains slow and unaggressive. Many feel that buyers are still in a year end holiday mood and have not returned to the
marketplace. Many Eastern EU countries are very curious on how the reintroduction of export subsidies will impact future sales. Most all
are hopeful that they will stimulate buyer interest as Eastern manufacturers and handlers state that they do have stock available for
immediate shipment.
0930C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. JANUARY 8, 2009 (REPORT 01)
OCEANIA OVERVIEW: Milk production trends in the Oceania region continue to gradually edge lower. Milk output in New Zealand is doing fairly well for this time of the season. December output was basically as projected, although cumulative production might be lagging projections. Weather conditions in New Zealand have been fairly stable with moisture falling in Western regions of both the North and South Island, while drier on the East Coast. Temperatures have been warm, but the hot summer temperatures are still to come. Milk volumes have been sufficient to maintain strong manufacturing schedules.
In Australia, preliminary November milk production figures indicate that output for the month was 1.5% heavier than last November. Cumulatively, for the first five months of the year, Australian output is 1.5% ahead of last year. Milk producers and handlers are hopeful that this positive trend will continue for the balance of the year, although as in New Zealand, hot summer temperatures are still to come which could quickly impact year end output.
Some milk processors in Australia are announcing lower payout prices to their suppliers/producers. This is a very unusual move for this time of the season. This is the first time since the 1980's that any milk processor had cut prices mid season. Manufacturing schedules in both Australia and New Zealand are strong with stocks of manufactured dairy products readily available. In instances, some manufacturers are looking for warehouse space for production that is not clearing Oceania shores. Usually, dairy products clear the shores shortly after production, but this year, reports of more uncommitted stock are occurring.
International buyer interest is slow and unaggressive. Deliveries of contracted volumes continue to clear to regular and ongoing customers, although these buyers are also being very cautious with their purchasing patterns in a weak market situation. In instances, buyers are working down their inventory and not carrying the level of supply that they normally would have on hand. Traders and handlers are hopeful that buyer interest will improve in the near future, but also state that economic conditions in Oceania, along with internationally, will probably limit significant sales for at least the first half of 2009.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. JANUARY 8, 2009 (REPORT 01)
WESTERN OVERVIEW: Milk production in Europe continues to hold at seasonal low levels, although milk producers and handlers indicate that seasonal increases will resume within the next few weeks.
Currently, weather has been milder than usual for this time of the winter season, although manufacturers and handlers state that the
first three months of the calendar year can be very nasty weather wise. Milk volumes are fully sufficient to maintain desired manufacturing schedules. Manufacturing facilities that are up and running are being selective in their milk procurements as new manufactured stocks are often uncommitted, thus clearing to inventory. Traders and handlers indicate that stocks of all dairy products are available for domestic and international buyer interest. Over the past few weeks, sales activity has been minimal which is typical for the holiday period of the season. Traders and handlers anticipate that buyers should return to the marketplace shortly, since many have been absent for quite some time.
Buyers, on the other hand, are stating that they will probably not be returning as quickly as suppliers project. Market unsettledness and depressed economic conditions in many countries will impact purchasing patterns for at least the first half of 2009 with some projecting that this could carry well throughout all of 2009. Although European prices are firmer than other international markets, suppliers and traders feel
that a pricing bottom might be near. Suppliers state that with supplies of dairy products appearing to be readily available both domestically and internationally, prices are not projected to realize a significant increase and will hopefully not slide further. Most feel that European offerings will still need to be priced favorably to remain competitive in a domestic and international market place.
EASTERN OVERVIEW: Milk production in Eastern Europe is at seasonally low levels. Seasonal increases in this region typically trail Western European trends by 4 - 6 weeks, thus new season increases are still a ways off. Winter weather conditions are more prevalent than in Western Europe which will also slow production development. Eastern European traders and handlers indicate that stocks are available for
domestic and international buyer interest. Some sales have been reported, although minimal in volume.
0930C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. DECEMBER 18, 2008 (REPORT 51)
NEXT REPORT NOTICE: This report will be next released on Thursday, January 8, 2009, and represents market information for the three week period of December 22, 2008 - January 9, 2009.
OCEANIA OVERVIEW: Milk production patterns in Oceania are trending lower as peak levels have been attained in both Australia and New Zealand. In New Zealand, milk output is declining along typical patterns, basically in line with previous year trends, although preliminary reports indicate that output might be trailing last season on an annual basis. Although this pattern might be developing, manufacturers and handlers are not overly concerned at this time. Last year, the significant decline in milk output occurred in late January and February due to lack of moisture. Some milk handlers are stating that La Nina weather patterns might be in play at this time. In Australia, milk output is declining also, but is following projected trends. Milk producers and handlers continue to project a 1% or so increase over last year. Late spring rainfall is occurring
in many regions of Victoria which is helping pasture growth, but is not significant enough to replenish greatly depleted water reserves.
At this time, milk volumes in both New Zealand and Australia are sufficient enough to maintain manufacturing schedules at projected levels. Stocks of manufactured dairy product are readily available for regular and onging customer needs with uncommitted volumes also being reported. In many instances, Oceania traders and marketers are looking for buyers to clear current and future production. In many instances, Oceania traders are pricing their offerings to remain competitive, although buyer interest remains slow and unaggressive.
Many buyers continue to exercise caution with their purchasing patterns and often are replenishing for near term needs only. In many instances, buyers lack confidence in current markets and are waiting for future developments. Typically during this time of the year, buyer interest slows and this year is no different. Traders and handlers are hopeful that buying patterns would pickup early in the new year, but economic conditions have impacted and will probably impact future sales trends. Many traders and handlers feel that dairy markets, both domestically and internationally will be slow for at least the first half of 2009.
0930c steve Schneeberger (608)250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. DECEMBER 18, 2008 (REPORT 51)
WESTERN OVERVIEW: Milk production in Europe is at or very near seasonal low levels. Milk producers and handlers indicate that increases are still a month to six weeks away, but the new production season is soon to resume. Currently, stocks of manufactured dairy products are available for both internal and international buyers.
At this point, most sales activity is centered around the internal market with international buyers generally still absent from the market place. Some small lot, near term, need orders are being reported, but minimal in comparison to overall sales.
Some questions about the recent tender for various dairy products are occurring. Some traders and handlers reported that cancellations were in order while others indicate that there are some irregularities that need to be worked out, but feel that the overall transaction will stand.
Slow butter sales are encouraging butter producers to prepare butter for offering to PSA January 1. Manufacturers and handlers feel that significant volumes will clear to PSA during January and February with volumes during this time also being prepared for intervention which will open March 1. As with PSA, intervention butter offerings have a 4 week production period prior to the opening of the program thus February production will be eligible for intervention offering on March 1.
Producers and handlers feel that intervention offerings will be heavy during the opening days of the program and possibly the 30,000 MT maximum volumes will be quickly filled. In years past, a tendering system was introduced to accept offerings after maximum levels have been attained.
EASTERN OVERVIEW: Milk production patterns in Eastern Europe are generally following trends for this time of the season. Some countries, especially Poland, are experiencing heavier output than last year at this time. Traders and handlers also report that sales activity is slow and unaggressive with stocks readily available for both internal and international need.
0930C steve Schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. DECEMBER 4, 2008 (REPORT 49)
OCEANIA OVERVIEW: New Zealand milk production is steady to trending lower seasonally, and continuing to decline from weak levels. Total milk intakes are typically running along levels of last year at this time. The decline and rate of decline are often heavier than expected and being compounded by the lack of moisture affecting pasture growth and quality.
Conditions are driest in the eastern areas of both the North and South islands. Australian milk output is currently steady to lower at levels close to a year ago. The general outlook is for production to move to lower than a year ago levels as the season progresses. The main reason is the forecast lack of moisture for pasture growth and the lack of irrigation water. Additionally, there are predictions for higher than normal temperatures.
Current grain prices are favorable and allowing for utilization in feeding milk cows to supplement grass. October estimates list Australian milk output at 1.5% higher than a year ago. This season's July-October production figures are running 1.4% higher than the same period in 2007. The overall market trends for dairy products continue to be weak in the Oceania region. Buying interest from export accounts remains slow.
The general world economic and credit problems are plaguing finished dairy product markets. Additionally, declining currency values against the US Dollars have created pricing discrepancies for products offered out of the region. Buyers are also waiting for lower prices before making purchases with some buyers only making purchases for short term, one to two month needs. Skim milk powder and whole milk powder values continue to trend lower in weak market conditions. Demand remains repressed because of world economic conditions, currency devaluations, ample offerings, and declines in purchases. Butter prices are lower with product slow to move into international channels. Cheese market prices are under pressure to move existing stocks.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. DECEMBER 4, 2008 (REPORT 49)
WESTERN OVERVIEW: Western European milk production is trending lower and is at levels close to last year at this time. Country trends are mostly consistent with recent months as reports are higher out of Germany, while several percentage points lower for France. Economic and world financial issues continue to plague the international markets and the ability of sales to be finalized. There are concerns that lower dairy product prices will erode the milk prices in the near
future.
Skim milk powder prices are leveling off as handlers would rather hold than sell, noting some sense of the market leveling. Buyers are often more willing to fill in supply chains after being out of the market. Butter prices are slightly lower with producers being able to place butter produced 28 days before January 1, into PSA after the first of the year. The PSA program will allow producers to have more stable pricing levels until the intervention program opens March 1. Whey prices are steady this week. There is more internal demand than export interest to clear offerings. The veal industry is taking
more whey.
EASTERN OVERVIEW: Eastern Europe milk output is mostly lower with a few countries, Poland being one, seeing higher output compared to last year. Manufactured dairy products are available for international markets. Pricing levels are often under pressure.
0930 CT Butch.Speth@usda.gov 608.250.3202
MD DA120 - OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. NOVEMBER 20 2008 (REPORT 47)
OCEANIA OVERVIEW: Milk production in Oceania is holding steady at seasonal high levels, while still showing signs of increases in Australia. New Zealand milk handlers indicate that the output is running at projected levels and is at levels of last year at this time.
In Australia, milk output is increasing, but slowed by limited moisture. During the winter months, lighter than necessary moisture occurred and spring rainfall has not been as positive as anticipated. Milk production figures were recently released which indicated that September's output trailed last September by 1.7%, although cumulative output for the first the first 3 months of the current season is up 1.4% from the comparable period last year.
Traders and handlers of manufactured dairy products indicate that sales activity is slow and unaggressive. Traders continue to acknowledge small lot sales but state that significant buyer interest is still absent. Most feel that slow sales continue to stem from declining prices. Some traders are indicating that longer term contract talks are starting to develop. Many feel that these activities are occurring as buyers anticipate that a bottom to recent price declines might be near. Negotiations for second half cheese contracts are resuming. Early indications are that buyers may have some carry over stocks for a portion of first quarter needs with second quarter requirements appearing to be greater. Stocks of manufactured dairy products are readily available for current and future needs with some traders and handlers discounting prices to clear stocks in the very near term.
0930c steve schneeberger 608-250-3204
MD DA100 EUROPEAN DAIRY MARKET OVERVIEW - MADISON, WI. NOVEMBER 20, 2008 (REPORT 47)
WESTERN OVERVIEW: Milk production in Europe is seasonally lower with milk output trending higher in Germany and lower in France when compared to last year at this time. In general, milk output is trailing last year at this time.
Stocks of manufactured dairy products are reported to be readily available for both internal and international buyer interest.
Results of the recently announced dairy product tender remain unclear. Some conversations indicate that product has been secured from European and Oceania sources, while others indicate that the entire tender has been cancelled.
The EU Governments met during the week and agreed to raise milk quotas by 1% each year until their elimination in 2014. A review of the situation in 2010 and 2012 will occur to make sure that the policy hasn't caused milk prices to plummet. On Thursday, the Dairy Commission was meeting and subsidies were being discussed. At this point, no information on the outcome of these discussions is available.
Also, within the past week, the European Commission agreed to open the Private Storage Aid (PSA) butter storage program 2 months early. Usually, this program opens on March 1, but will open on January 1, 2009. The program will remain open until August 15, 2009. Butter can be produced during December and offered to the program after the first of the year. Many butter producers are pleased with this opportunity as December is typically an active month for production and with buyer interest slow, producers and handlers have an opportunity to clear their unsold stocks versus causing prices to erode further.
Currently, butter prices are at or slightly below intervention levels which will open on March 1. Skim milk powder prices are also below intervention levels. European traders and handlers are aware of the situation in the U.S. where surplus skim milk powder is clearing the Dairy Support Program (CCC) at $1765 per MT.
In recent week, over 60 million pounds of powder have cleared to CCC. Traders and handlers indicate that overall buyer interest remains slow and unaggressive. In most instances, buyers are hesitant to procure any significant volumes of product in a declining market situation, although some buyers are starting to inquire about product availability and possible sales as prices for some products might be nearing a low point.
EASTERN OVERVIEW: Milk production in Eastern Europe continues to edge lower. In many instances, output is at seasonal low levels. Manufacturers and handlers indicate that stocks are available for both internal and international buyer interest. Buying interest remains slow and unaggressive with sales activity centering around an internal market at best. Traders and handlers feel that buyer stock levels should be nearly gone, thus they are hopeful that buyer interest will resume in early 2009.
0930C steve schneeberger (608)250-3204
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. NOVEMBER 6, 2008, 2008 (REPORT 45)
OCEANIA OVERVIEW: Milk production levels in New Zealand are running ahead of last year's reduced output by up to 8%. The levels are thought to be close to the peak of the seasonal milk output. Production on the North Island is trending slightly below year ago levels, while output on the South Island are higher than last year.
Australian milk output is forecast to be running at a seasonal rate of 1.4% higher over last year with regional variations at both higher and
lower levels. Drought conditions are forecast to continue in the country and water allocations are being cut. All dairy product markets are under distress as outputs increase and the demand picture weakens. Some limited marketing slowdowns were noted because of a country holiday in Australia.
Weaker international prices have tended to be the case for all products. The continuation of CCC support price offering in the U.S. at $1765 per MT continues to keep the price focus at that level. Weaker WMP prices are coming out of the region with the market focus on a regional auction with the market trending towards that $2400 mark.
The currencies in Australia and New Zealand have weakened against the U.S. dollar, which has helped sustain exports.
0930c Butch.Speth@usda.gov 608.250.3202
MADISON, WI. NOVEMBER 6, 2008 (REPORT 45) - WESTERN AND EASTERN EUROPE
WESTERN OVERVIEW: Milk production in Western Europe is steady to up to 1% higher overall. Current levels are at or near the low point of the production cycle. Output in Holland and Germany are reported to be lower than last year, while output in France is trending slightly
higher.
With lower milk prices beginning to move to the farm level, milk production levels may not keep the 1% projection and expansions would also be impacted. Dairy product movements into world markets have slowed due to weakening demand.
Credit and finance issues are playing a big part in curtailing marketings of dairy products. Fluctuating currency levels also are a factor. Skim and whole milk powder market prices continue to weaken. Demand is fair for internal needs, but remains slow into international markets. Market pricing is often compared to U.S. support price offerings in the U.S. at $1765 per MT for NDM, although trading from the U.S. is not currently at those levels. Butter prices are lower and stocks are being pulled from PSA.
EASTERN OVERVIEW: Seasonal milk declines continue across Eastern Europe. Handlers and processors are seeing dairy product output at several percentage points ahead of last year in Poland, while other countries are flat to lower. Declining milk prices are noted in several countries. Dairy products are available, but the interest level is better for internal usage while more limited into export channels.
0930C butch.speth@usda.gov (608)250-320
MD DA120 OCEANIA DAIRY MARKET OVERVIEW - MADISON, WI. OCTOBER 23, 2008 (REPORT 43)
OCEANIA OVERVIEW: In New Zealand, milk production is trending higher and several areas are at high levels as the seasonal peak is being neared within the next two weeks to a month. Total intakes are running steady when compared to last year and projections are likely tempered by general factors such as a cool spring to rainfall. In general, plants are running full with milk moving into more balancing locations. A full range of products is being produced. Casein production is active as those plants help with the milk flow and future commitments are made. Australian milk production is steady to higher. There are forecasts that call for milk to be as much as 1-2% higher than the 2007 season, but some are calling that optimistic at this point. Latest numbers are 3-4% higher and declining from higher earlier changes. The drought conditions persist in North Victoria.
Water supplies are limited for irrigation. Forecasts are for average to below average rainfall in coming months. Winter grain crops are developing and the volumes are expected to be higher as more areas were planted, although now being offset by lower yield expectations.
Increased grain harvest will allow for supplemental feeding to dairy cattle. Coastal regions are experiencing more normal rains with crops and pastures in good shape.
World economic conditions are a factor in most markets and with most products. Exchange rates are lower in Oceania and impacting imports and exporting of products. Dairy product prices are lower. Shipping costs are beginning to trend lower, reflecting declines in fuel.
0930c Butch.Speth@usda.gov 608.250.3202
Data Source: USDA
MADISON, WI. OCTOBER 23, 2008 (REPORT 43) - WESTERN AND EASTERN EUROPE
WESTERN OVERVIEW: Temperatures are starting to trend lower and fall moisture is prevalent in most European areas. At this point, pastures are in decent shape as moisture continues to encourage late season
growth, although producers and handlers indicate that milk volumes are declining. Overall milk production is running ahead of last season at this time, with output during recent months experiencing positive growth. Although milk volumes are somewhat heavier than usual for this time of the season, manufacturing plants are reducing their production schedules. In most instances, stocks of manufactured dairy products are readily available for both domestic and international buyer interest.
Most traders and handlers state that any sales that are occurring are for domestic or internal needs with international buyers still absent from the market place. Prices for most products continue to trend lower.
Weaker prices are not just a situation in Europe, but throughout the international market place. In the United
States, surplus nonfat dry milk powder is clearing to the Dairy Support Program (CCC) at $0.80 per pound (around $1765 per MT) with European prices responding by trending lower. Bids for the recently announced dairy product tender have been submitted and now traders and handlers are waiting for the outcome. Butter continues to re-enter the European market place from PSA. Along with weakening prices,
economic unsettledness continues to also play a role in slow international dairy product sales. In most instances, international currencies are weak against the U.S. dollar.
EASTERN OVERVIEW: Milk output in Eastern Europe continues to decline seasonally. Manufacturers and handlers indicate that new product production is declining, but they state that they have readily available volumes of stock for both domestic and international buyer interest. At this time, sales that are occurring are for short term internal needs.
0930C steve schneeberger (608)250-3204
Data Source: USDA
MARKET OVERVIEW - MADISON, WI. OCTOBER 9, 2008 (REPORT 41)
OCEANIA OVERVIEW: The new milk production season is well underway in New Zealand with milk volumes estimated to be at 2/3 of peak level. Milk handlers indicate that output trends are basically on track with projections. Usually, milk will peak out in New Zealand around the end of the October. At this point, milk volumes are slightly heavier than last year at this time.
In Australia, lack of moisture continues to be a major concern for dairy producers, although milk output in August ran 1.2% ahead of last year with cumulative volumes 3.6% heavier than the first two months (July and August) of last year. In Victoria, the major milk producing region of Australia, water allocations in Northern parts of the region will be lower this season as insufficient volumes of winter moisture occurred to replenish greatly depleted reserves. This region is dependent on irrigation water to maintain pastures during the growing season. In more Southern regions, moisture is typically more naturally available and pastures are able to be maintained without supplemental water. Grain prices are easing, thus dairy producers that will be securing supplemental feed stocks, due to limited moisture for pastures, will be able to do so without excessive cost.
Current economic unsettledness in the U.S. is starting to impact other international markets including Oceania. In recent days, the Australian and New Zealand dollars, against the U.S. dollar, have weakened greatly. The unsettled economy, along with weakening international dairy product prices, has slowed buyer interest greatly. Oceania traders indicate that some buyers that locked into long term fixed contracts are not pleased at the current trend of prices. For those that are nearing the end of the initial contract, shorter terms are being negotiated. For those contracts that are nearing completion, prices for future products will be considerably lower. Traders and handlers question how much lower prices will trend before markets stabilize and buyers return to the marketplace. The recent melamine situation in China continues to impact their dairy industry. Additional detections of melamine in dairy products continue to be reported, thus buyer confidence in Chinese generated dairy products is low. Some Oceania traders and handlers indicated that a few weeks ago, buyer interest from China for whole milk powder was enhanced by 20 - 30%, but now has eased. Some uncommitted volumes of whole milk powder were available for this inquiry, but now are no longer available.
0930c steve Schneeberger (608)250-3204
MADISON, WI. OCTOBER 9, 2008 (REPORT 41) - WESTERN AND EASTERN EUROPE
WESTERN OVERVIEW: Milk output across most of Europe continues to decline towards seasonal low levels with many countries reporting no to slight gains when compared to year ago levels. The growth rate has slowed in recent months. The biggest gains versus a year ago are in the Netherlands; while the UK is reported to be having the largest declines. Milk supplies continue to be available for processing with plants making products that they have orders on the books. Production of most dairy products is declining and is tracking milk availability.
Demand for dry dairy products has trended lower. There are concerns about Government Dairy Price Support purchases of NDM in the United States beginning and international traders/buyers are assessing what effect lower prices in the U.S. will have on international prices. Major economic declines in most major international stock markets, fluctuating currencies, and unsettled consumer confidence, are all creating uncertainty in world demand.
Few developments are taking place for producers/traders hoping to place supplemental product into China. There are some speculative purchases, but overall volumes are light. An export tender was announced and bids were taken to buy SMP and WMP. The unsettled world markets will likely affect prices and quantities. Butter and butteroil demand are trending lower as fresh stocks are available for packaged sales and PSA butter is moving to fill in manufacturing needs. Offerings of cream are widely available.
EASTERN OVERVIEW: Eastern Europe milk production ranges from steady to mainly lower. Conditions have tended to make milk output slow. Processing schedules are often lower to accommodate the declining milk supplies. Product movements into international markets have slowed and pricing is often under pressure. Domestic orders are moving along projected levels.
0930C Butch.Speth@usda.gov (608)250-3202
Data Source: USDA
DAIRY MARKET OVERVIEW - MADISON, WI. SEPTEMBER 15, 2008 (REPORT 39)
OCEANIA OVERVIEW: Seasonal milk production in Oceania continues to build.
In New Zealand, moisture continues to fall, although more sun is appearing, thus pastures and walkways are becoming less saturated. Early indications are that milk output appears to be on schedule with projections. Milk producers and handlers continue to project milk production to be 6 - 7% heavier than last year and build on the 2006 - 2007 by 2 - 3%.
In Australia, the milk production season is still in the very early stages of increases. Milk handlers indicate that July output was stronger than the previous year by 6.5% and report that August output was also positive. At this point, production projections for the season are basically unchanged from earlier projections of a 1% increase over last season. Moisture, or lack of moisture, continues to be a concern for most dairy producers. Rainfall has been occurring during the winter season, but not significant enough to replenish greatly reduced water reserves. Pastures are greening and early grass growth is positive, but water availability for later in the season is what concerns producers the most. New stocks of manufactured dairy products are starting to be generated.
Manufacturers and handlers indicate that some stocks are clearing the Oceania region, although volumes are not as fully committed as usual for this time of the season. Buyers are hesitant to commit to significant volumes at this time as prices for most products are weakening. At this point, most Oceania traders and handlers are not overly concerned with sales activity, although they do hope that dairy markets will stabilize soon so that normal activity will resume.
Many traders and handlers are discussing the dairy situation in China and what impact this may have on imports into that region. Oceania traders question the level of buyer confidence Chinese consumers have with other dairy products and its' impact on their dairy industry. They are also concerned about consumer acceptance of imported items. Most traders indicate that it is still early for many of these concerns and questions to be answered and realized.
WESTERN EUROPEAN OVERVIEW: Milk production in Europe continues to seasonally decline.
In recent days, temperatures have dipped to unseasonably low levels. Milk producers and handlers indicate that these temperatures will not help late season production trends, but at the present time, no significant reductions are being reported. Overall milk production continues to lag last year, although output in countries such as The Netherlands and France is running stronger. In Germany, milk output is basically steady with last year, while milk production in Ireland and the United Kingdom is trailing last season.
Milk volumes in general are sufficient to keep manufacturing plants that are still in operation running at favorable levels. In most instances, manufacturing schedules are declining at all locations, with some operations cutting back on operation days.
Stocks of manufactured dairy products are available for both domestic and international buyer interest. At the present time, buying interest is slow and unaggressive as prices continue to decline at a steady pace. Any sales activity that is occurring is usually for short term or immediate needs.
Traders and handlers speculate that buyers will remain absent from the marketplace until markets stabilize. Some traders anticipate that a major tender for various dairy products might soon be announced. Traders and handlers are hopeful that they may be able to get some of the tender volumes, but realize that international prices for dairy products are often lower than European prices.
Butter continues to exit the PSA program. Although the PSA program closed on August 14, some butter was still in transit into the program, thus annual volumes were near the 160,000 MT level. The 2008 open season (March 1 - August 14) total volumes compare to nearly 124,000 MT last year.
EASTERN EUROPEAN OVERVIEW: Milk output in Eastern Europe continues to edge lower as temperatures decline in many regions. Milk producers and handlers indicate that lower temperatures are occurring earlier this year than typically is the case. Manufacturing schedules are
declining, although traders and handlers report that stocks are available for both domestic and international buyer needs. As is occurring in most all markets, buyer interest is quiet. Most feel that weakening prices are the major factor at this time. Many feel that once markets stabilize, buyers will return to the marketplace for fall and winter needs.
0930C steve Schneeberger (608)250-3204
Data Source: USDA
DAIRY MARKET OVERVIEW - MADISON, WI. SEPTEMBER 11, 2008 (REPORT 37)
OCEANIA OVERVIEW: New Zealand's milk production season continues to develop, although wet conditions prevail. Producers indicate that that they are thankful for the moisture, but would like to see more sunshine. Sunshine would reduce muddy conditions and help with pasture growth. Milk handlers indicate that milk volumes at this time of the season are on track with projections.
In Australia, the milk production season is showing more signs of increases. Recent rainfall is providing sufficient moisture to establish early pasture growth and provide a good start to the production season. The concern for many is the lack of reserve water for use later in the summer. During the winter months, lighter than desired amounts of moisture fell. Winter moisture did replenish some greatly depleted water reserves, but was much lighter than needed. Winter snow melt and hopefully some additional rainfall this spring will help with water reserves. The Bureau of Meteorology recently announced that the national outlook for spring (September - November) rainfall is basically neutral for most of the country, but project that moisture conditions in central and southern Australia will more likely be drier. Early milk production data for the first month of the 2008 - 2009 year indicate that milk output during July was 6.5% higher than last year.
Traders and handlers of manufactured dairy products indicate that prices continue to decline. Most traders state that buyer interest is light, with sales activity that is occurring centered around short term needs. Traders feel that buyers are steering clear of significant commitments due to weakening prices. Traders also indicate that buyers are very hesitant to commit to any type of long term contracting period and limiting themselves to shorter contracts at this time. Many traders state that a larger portion of early season production is uncommitted this year versus years past.
WESTERN EUROPE OVERVIEW: European milk production continues to edge lower.
Milk producers and handlers are indicating that the volumes are declining, although the pace of the decline is more gradual than in years past. Manufacturing facilities are adjusting their production schedules to address the declining milk volume. In many areas of Europe, milk volumes are trailing quota levels for this time of the season, although many feel that this deficit may narrow by the close of the quota year in March 2009. Some feel that the additional 2% quota increase this year will be filled by a few countries, but will not be attained by many. Contacts feel that those countries that are at or near quota levels had the infrastructure to respond to additional quota, while other countries are not yet there.
International buying interest remains slow and unaggressive, although some traders and handlers are indicating that some buyers are starting to return to the marketplace. Traders and handlers state that within the next two to three weeks, they anticipate that buyers will be returning to the marketplace in greater numbers for future needs. The summer holiday season is over and buyers are now looking at their fall and winter needs more closely. Stocks of manufactured dairy products are reported to be available with prices lower to sharply lower than just 4 - 6 weeks ago.
The weakening price trend is just not occurring in Europe, but in most other international markets. Traders feel that buyers may be hesitant to procure significant volumes of product in a weakening market, but feel that they will be procuring for at least near term needs until the market becomes more stable or starts to turn around. PSA for butter is closed and butter is now clearing back into the marketplace. During the open season, 150,991 MT of butter were offered into the program. Current year clearances are 21% heavier than last years' 118,538 MT.
EASTERN EUROPE OVERVIEW: Milk production in Eastern Europe continues to decline. Milk producers and handlers state that they have had a reasonable production season. As milk volumes decrease, manufacturing schedules are also being adjusted. Traders and handlers indicate that they have stock available which is often priced lower than their Western European counterparts. At this point, buyer interest is slow, but traders and handlers are hopeful that this will increase soon.
0930c steve Schneeberger (608)250-3204
Data Source: USDA