Whole Milk Powder - Oceania

     Whole Milk Powder - Oceania

     Report 41 - Released on October 11, 2018

     Prices for whole milk powder in Oceania are lower. Not so low that manufacturers are no
     longer profitable, but lower and continuing a trend of weaker prices in recent periods. The
     trend of weakness seems more distressing to manufacturers than the absolute current price.
     Some price strengthening will be welcome, even if current conditions may cause that to be a
     heavy lift. The primary factor mentioned is the early season strength of milk production
     beyond expectations. Some dairy industry participants noted that exceeding expectations does
     not always lead to better price outcomes. WMP production has been the early season focus of
     dairy processing in the region. With exports remaining generally steady, some WMP plants are
     comfortable to slightly back off and let more milk flow to other uses, often cheese or
     butter plants. That might change if current interest from China becomes finalized into new
     contracts for more WMP than is currently covered by contracts.

      Weaker WMP prices are also a concern because WMP prices, among all dairy products, have the
     greatest impact on farmgate milk prices. This week�s announcement that a large New Zealand
     dairy cooperative revised projected farmgate milk prices lower is an example of the tie
     between WMP pricing and what dairy producers receive for their milk.
     Prices for: Oceania, All First Sales, Free on Board - Port, Conventional, and Edible Whole
     Milk Powder
     Price Range - 26% Butterfat; $/MT:                     2,650 - 2,800

     Information for the period October 1 - 12, 2018, issued biweekly

     Secondary Sourced Information:

     WMP exports from New Zealand January-August this year were up 0.4 percent from January-
     August 2017, according to CLAL. Country percent change comparing January-August 2018 with
     2017 (CLAL data) is shown below.

                       New Zealand WMP Exports

                           % Change
     Destination           Jan.-Aug. 2018/2017
     China                 -10.8
     Algeria               +7.1
     United Arab Emirates   +1.5

     WMP exports from Australia January-August this year were up 14.2 percent from January-August
     2017, according to CLAL. For the top three export destinations the table below shows country
     percent change comparing January-August 2018 with 2017 (CLAL data).

                      Australia WMP Exports

                      % Change
     Destination      Jan.-Aug. 2018/2017
     China            +56.5
     Singapore        -35.3
     Sri Lanka        -97.8

      At GDT event 221 on October 2, the WMP all contracts price, $2,753 declined 1.2 percent.
     The November contract price, $2,781, decreased 2.6 percent. The current all contracts price
     is 7.4 percent lower than event 216 on July 17.

     Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: eric.graf@ams.usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: http://www.ams.usda.gov/market-news/dairy
     DMN Database Portal: http://www.marketnews.usda.gov/mnp/da-home