Milk Production
New Zealand milk production stronger than last year
Milk production in Australia this season, started July 1, is expected lower than last season. Recent meteorological forecasts note an increased chance of an El Nino in the coming months, leading to below average rain across Australia.
Milk production in New Zealand, in August 2018, was +4.7% compared to August 2017. The increase of the first quarter of the 2018−19 season is +5.5%, compared to June-August 2017. The weather is favorable and the pastures are pretty green.
Oceania Butter prices are higher. The volumes of milk available for processing into butter are still seasonally low. Almost all current production is already committed through the year and first quarter of 2019. Very little spot market availability exists.
The strong uptick in seasonal milk production has resulted in the ability to make more early season WMP, and prices weakened. More WMP will be made available for sale at GDT events during October, November and December.
SMP prices are lower. Many large customers have already contracted through 2018 and current demand for new Oceania SMP contracts seems lower. SMP production will increase later this year and into 2018, as available milk volumes increase.
Cheddar Cheese prices also decreased. The cheesemaking plant capacity is greater than is now being used. Buyers understand that as milk output increases, so will cheese output. Prices are also affected by competition from exporters in other regions.