- news, features, articles and disease information for the cattle industry

Dairy Australia - Market News

26 June 2015

Dairy Australia - Market News 26 June 2015Dairy Australia - Market News 26 June 2015

Dairy Australia - Market News

Global Developments

Event 142 on the GlobalDairyTrade (GDT) auction platform produced a mixed set of results, but ultimately the seventh successive decline in the GDT Price Index (which fell 1.3%, on an average price of US$2,409/t). Pricing for both SMP (down 0.2% to an average of US$1,978/t) and WMP (down 0.1% to an average of US$2,327/t) was relatively stable, with contract 2 (August) New Zealand product posting gains of up to 3%. Butter recovered some ground (up 3.3% to an average of US$2,707/t), but it was more bad news for sellers of AMF; a further 8.9% decline reflecting an average of US$2,814/t. GDT cheddar pricing was boosted 2.4% to US$3,128/t, while buttermilk powder leaped 10% to US$1,975/t. Full results at

Dual ASX/NZX-listed milk A2 Milk Company has received an ‘indicative, conditional and non-binding’ expression of interest to acquire all shares in the company. Following media speculation, the expression of interest was revealed to have been submitted jointly by substantial shareholder Freedom Foods, and major American food and beverage company Dean Foods. A2 boasts a 9% value share of the Australian fresh milk grocery market and has operations in China, the UK and the USA.

Russian president Vladimir Putin has announced an extension of the embargo on many food products from key western suppliers, according to Russian media sources. Some outlets had quoted an extension to January 2016 in response to an EU decision to maintain sanctions against Russian interests for a similar period, but more recent reports suggest a full year extension (to August 6, 2016). The embargo covers imports of a range of food and agricultural products (including dairy) in response to sanctions imposed by a number of countries over the conflict in eastern Ukraine. Exporting countries affected include the United States, European Union, Australia, Canada and Norway – though exceptions have periodically been made.

Canada’s heavily protected dairy industry made international headlines this week, amidst reports that large volumes of excess skim milk are being dumped in farm manure lagoons. “Unprecedented” demand for butter and cream, inadequate processing capacity and flat demand for fluid milk have all been blamed for the current situation, though the country’s supply management regime has again become the subject of debate. Critics have accused the system (based on production quotas and high import tariffs) of being too inflexible to properly match supply and demand, whilst other sources have blamed increasing imports of milk protein-based ingredients – which displace more expensive Canadian fluid milk in production of other dairy products.

The Australian Front

Murray Goulburn and Bega/Tatura both announced opening prices of $5.60/kg MS for the 2015/16 season this week. The MG price is for their Southern Milk Region; they also re-confirmed a forecast full year average of $6.05/kg MS. The forecast is subject to certain assumptions, including global dairy commodity prices and prevailing exchange rates, and assumes an average Australian dollar of $US0.76 during financial year 2015/16. If the forecast is achieved, MG suppliers will receive total farmgate returns in excess of $6.00/kg MS for the third consecutive year. MG also announced an opening price of 53.2c/L ($7.39/kg MS) for its NSW-Sydney region suppliers, a 4.0% fat and 3.2% protein.

Meanwhile, Warrnambool Cheese and Butter announced their final step up to the farmgate milk price for 2014-15: 6c/kg fat and 12c/kg protein, bringing their full-year average milk price to $6.10/kg MS.

Beston Global Food Company have purchased UDP and its two plants at Murray Bridge and Jervois. The Adelaide-based company plan to invest to upgrade the factories, raise production capacity, and introduce new products for Asian markets. The factories are scheduled to re-open in September.

Harvey Norman boss Gerry Harvey, one of Australia’s richest people, plans to invest up to $80 million into an intensive dairy farming operation near Shepparton. This latest investment in dairy by a high profile Australian follows the announcement last year that Gina Rinehart would invest in Queensland dairy farms to supply infant formula to China.

DOWNLOAD REPORT:- Download this report here


Seasonal Picks