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TheDairySite Newsletter - 04 September 2015

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Friday 4th September 2015.
Michael Priestley - Editor

Michael Priestley

MSD Animal Health

High China Dairy Inventories to Stave Off Dairy Markets Recovery

Any hopes of a dairy market recovery from consecutive positive Fonterra auction results are false, according to US dairy analysts with an eye on Chinese production.

China’s milk production, much like elsewhere, has been considerably higher this year, with surpluses being diverted into a growing powder inventory.

For this reason, the US Dairy Export Council’s analysts have reiterated the prognosis of other sources for no dairy market price rebound until mid-way through 2016.

They suggest China could be sitting on 300-400,000 tons of powder.

This insight comes from USDEC’s Marc Beck, who is expecting US dairy exports to decline for the first time since 2009.

He this week described China’s strong demand in 2013/14 as a “buying bubble” representing “false demand” and prices are now being hurt by a net supply increase of 13 million tons of milk.

Price recovery hopes were ignited this week by a second positive result in Tuesday’s Global Dairy Trade, seeing a huge 30 per cent lift in Butter Milk Powder, as well as further increases in Skim and Whole Milk Powder.

Dairy Australia said forward SMP and WMP prices suggest bidders are not expecting any dramatic recovery in the coming months. The levy board also noted that volumes were 37 per cent down in year on year terms.

With world prices “well below” those in the US, movement of US butter and cheese has slowed.

This is according to Professor Bob Cropp, University of Wisconsin-Madison, who said “rather optimistic” futures markets at the mid-way point in August were more likely to drop than lift.

He wrote that milk production must drop to clear the overhanging supply of dairy products.

Yesterday’s latest dairy products dashboard from the European Commission showed EU summer milk production was well ahead of prior years.

Latest world quotations showed Europe had the most expensive milk powders but US Cheese and Butter were ahead of both Oceania and the EU.

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Market Reports

USDA National Dairy Products Sales Report - 3 September 2015
UK Animal Feed Statistics - July 2015
Irish CSO Reports - Milk Statistics July 2015
USDA Agricultural Prices - 1 September 2015

Global Dairy Industry News

   United Kingdom

Tesco Announces Winter Milk Price Deal with Processors
Arla Profits €28 Million Down in First Half of Year
Arla Banking on Dairy Market Turnaround in First Half of 2016
Tesco Urged to Improve Welsh Cheese Prices
Surveillance Farms to Help in Liver Fluke Battle
Minister to Fight for Dairy Support at EU Commissioner Meeting
Welsh Badger Vaccination Reaches 5000
New Proposals to Tackle Bovine TB Announced


Nutreco Renames Animal Nutrition Research Division, Doubles Investment

   European Union

Preparations Intensify Ahead of EU Agricultural Meeting


Ireland Calls for Swift Action to Save Dairy and Pork Market Confidence


New Partnership Offers Support to Small Farm Organisations
African Partnerships to Increase Arla’s African Income Five Fold


Spanish Cry for 25 Pence Per Litre Minimum
What Can Save Europe’s Dairy Farmers: A Spanish Checklist

   United States

Family Dairy Farm Managers Earn Less, but Gain Emotional Wealth
US Farm Exports Standing Firm
Growing Chance of Holstein Inbreeding Accelerates
Feed Industry Hits Out at Antimicrobial Reporting Rule
World Dairy Expo Cattle Entries Due by 31 August


Foot and Mouth Rumours Confirmed in Angola

   New Zealand

Beef Diversification: A Lifeline for New Zealand Dairy Farms?


Anthrax Kills Cattle After 2014 Floods in Slovenia


Alpacas Test Positive for Bovine TB in Norway


Livestock Farmers Suffer After Monsoon Flooding in Myanmar


The Drost Project - A Visual Guide to Porcine, Pig Reproduction.
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Biomin - Dairy Heifer: How to Get a Fast Start to Greater Lifetime Profit
US Sales Manager Wanted - 5m Publishing
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