TheDairySite.com - news, features, articles and disease information for the dairy industry

Dairy Australia - Market News


26 January 2015

Dairy Australia - Market News - 26 January 2015Dairy Australia - Market News - 26 January 2015


Dairy Australia - Market News

Global Developments

The GlobalDairy Trade (GDT) Price Index rose for the third consecutive event this week. Event 132 concluded with the index up 1%; a weighted average price of US$2,758/t. This builds on 3.6% and 2.4% rises at events 131 and 130, respectively. Following four strong successive results for fats, butter edged a little higher (0.1%, to US$3,564), while the market for AMF pulled back 5% to US$4,286: which still has pricing above mid-December levels. Key powders continued to show positive sentiment. The fourth successive increase for WMP, 3.8% (to US$2,402), was likely supported by reports of drying weather in New Zealand, and a reduced Fonterra offering – both for event 132, and on forecasts through to April. SMP posted a modest 1% increase, to US$2,389, 49% lower than at the equivalent auction last year. Cheddar fell 4.3%, but remains above November pricing. It was announced this week that Arla Foods Ingredients (AFI) will begin offering Lactose on GDT from event 138 in April. Arla already sells BMP and SMP through GDT. See www.globaldairytrade.info

Almost 24,000 dairy farming enterprises, 50.4% of the dairy farms in America, signed up for the new Margin Protection Program (MPP) for 2015. The program will provide payments when margins (as calculated by the USDA) are below the coverage level selected by the individual producer each year. Some 55% of producers that enrolled for the program selected a higher than base level of coverage. The 19 December deadline included a two week extension, and it appears that a number of producers signed up during this period—perhaps not surprising, as there have been considerable falls in US dairy commodity prices. This is reflected in the January WASDE report, in which the USDA lowered its 2015 all-milk price forecast by almost 4% from their December estimate. The USDA also reduced its forecasts for 2014 and 2015 production, down 0.1% and 0.2%, respectively.

ANZ Bank New Zealand reportedly cut its Fonterra NZ milk price forecast for the 2014/15 season to NZ$4.35/kg MS this week, noting that this would be “well below break-even for many dairy farmers.” Contributing factors cited by the bank included expectations that dairy market price recovery will be prolonged and modest, with inventories taking some time to clear. ANZ also expects that low oil prices will impact on demand from oil-dependent nations. Fonterra NZ’s current forecast farmgate milk price is $4.70/kg MS.

The Australian Front

Following on from last edition’s update featuring Gina Rinehart’s Hope Dairies (WA) involvement in the expansion of southwest WAbased niche fresh dairy player Bannister Downs: recent local media reports in Queensland have shed a little more light on activity in connection with the Gina Rinehart-controlled Hope Dairies on the east coast. The South Burnett Times quoted Mr Clint Brereton as saying the large-scale dairy farm would be operational by 2016, sourcing 40% of

its feed locally while growing 60% of its own requirements. Mr Brereton also suggested that proximity to Dalby feed growing areas and the local wheat belt were key factors in siting the dairy in the South Burnett. Hope Dairies has reportedly acquired 4,000 hectares of land in the South Burnett area for cropping In addition to sourcing local feed, the reports indicated that the company needed 11,000 milkers, 4,000 heifers, to produce the targeted 150 million litres of milk. The Queensland Hope Dairies project, integrating farm raw milk to infant formula manufacture, was announced late last year.

Meanwhile, Camperdown Dairy International (CDI), another aspiring milk powder export market entrant, has been progressing its plans to establish a manufacturing capability at Camperdown in western Victoria: local media reported that demolition work is planned to continue into March at the former Bonlac site which is slated for a $120 million factory rebuild later in the year. Part of the site is already occupied by unrelated Camperdown Dairy, a subsidiary of Aussie Farmers Direct, which late last year heralded its intentions to expand its fresh dairy business into Asia-bound exports. CDI announced in May 2014 its plans to establish a farm-to-factory operation targeting 100 million litres throughput, with backing from agricultural investment management company EAT Group and mining services company MCG Group. Aside from its Camperdown project, MCG Group has been diversifying its interests across property development, construction and logistics services.

Sill in western Victoria: Australian Dairy Farms Group, listed on the Australian Securities Exchange back in October, has attracted Canada’s Desmarais family to its share register. The fledgling listed corporate dairy farmer was reportedly undertaking due diligence on several farms in December looking to build on its three farms in pursuit of an ambitious 50 million-litre-a-year target.

DOWNLOAD REPORT:- Download this report here

Our Sponsors

Partners


Seasonal Picks

British Field Crops 2nd edition