The Dairy Australian February 2012

Contents 1.

Bega announces dairy facility expansion for Middle East focus

2.

Murray Goulburn joins GlobalDairyTrade

3.

United Dairy Power’s South Australia deal complete

4.

Grape marc proves a winner for farmers and the environment

5.

Jerseys lead the way at International Dairy Week

6.

Australian cheeses triumph at global awards

7.

The stage is set for the Australian Grand Dairy Awards

8.

Dairy’s link to sport nutrition

9.

Sarah Xu – International Market Manager

10.

International dairy dates

11.

Twice baked Cheddar soufflé with walnuts, grapes and balsamic glaze

12.

Australian production summary

13.

International market summary

Bega announces dairy facility expansion for Middle East focus Bega Cheese has announced a $7.8 million expansion of the company’s Tatura facility in northern Victoria in response to increasing market opportunities in the Middle East. The expansion of the cream cheese making plant will create extra jobs and increase production capacity of the facility from 15,000 tonnes to 22,000 tonnes per annum. Bega and the Victorian Government announced the expansion to buyers, delegates and media at the annual Gulfood trade fair in Dubai, one of the world’s largest food and beverage shows, held in Feburary.

Bega Cheese posted a net profit after tax of $21.7million in 2010/11 with consolidated sales revenue up 1.4 percent to $931.7million Group revenue in 2012 is expected to be about $1billion.

The Tatura facility has been producing cream cheese and specialty frozen milk-fat ingredients for more than 30 years.

The Victorian Government led Victoria’s largest ever trade mission to the Middle East, supporting over 100 companies aiming to increase the value and volume of exports to the region.

It exports dairy products to key markets in the Persian Gulf region including the United Arab Emirates, Kuwait and Saui Arabia.

Victorian Innovation, Services and Small Business Minister, Louise Asher, made the announcement with Bega in Dubai.

The Tatura facility will need an extra 30 to 40 million litres of milk per year once the expansion is running at full capacity in three years.

“This announcement is a clear sign of the strength of Victoria’s dairy industry, and in particular, the opportunities present for our clean, safe and reliable dairy exports to the Middle East region.”

Bega Cheese Chief Executive, Aidan Coleman, said the expansion had been a 12 month project and would generate added investment and jobs in the dairy industry and further drive innovation and export outcomes. “This follows our purchase and investment in the former Kraft site at Strathmerton, which has significantly increased our production capacity in northern Victoria,” Mr Coleman said.

The Gulfood trade fair also saw Murray Goulburn commit to expansion in the region and Warrnambool Cheese and Butter launch its award-winning vintage cheddar. Ms Asher also announced a Dairy Scholarship Program initiative aimed at delivering increased exports of value-added dairy to the Middle East.

“We are proud to be working with the Victorian Coalition Government on these ongoing trade and investment projects including the Dairy Nutriceuticals to Asia Program which aims to significantly increase our export of infant formula and other nutritional powders to Asia and the Middle East.”

“Our Dairy Scholarships Program will give groups of media, government and business professionals from the Middle East a chance to visit Victoria, learn about our dairy capabilities and investigate mutually beneficial business opportunities,” she said.

Bega is the largest dairy company listed on the Australian Securities Exchange with a market capitalisation of approximately $250 million following a full merger with Tatura Milk Industries (TMI) last year.

Middle Eastern retailers; importers and distributors; government authorities involved in health promotion and policy; import regulation and licensing; and manufacturing businesses importing specialised dairy ingredients will participate in a series of educational and buyer missions into Victoria.

In late 2011, 99 per cent of TMI shareholders voted for a full merger with Bega and the proposal was approved by the Supreme Court in December. Under the scheme TMI became a wholly owned subsidiary of Bega. 1

The Dairy Australian - February 2012

Total Australian exports of dairy product into the Middle East and North Africa region were worth $305 million in 2010/11.

Murray Goulburn joins GlobalDairyTrade Murray Goulburn Co-operative (MG), the largest milk processor in Australia’s multi-billion dollar dairy industry, will begin using the online auction platform GlobalDairyTrade (GDT) from April. MG will offer lactose, a product that is growing in importance in the market place. Lactose is increasingly in demand as a key ingredient in products such as baby formula and other nutritional foods. MG Managing Director, Gary Helou, said the company was very pleased to be participating in GDT which represents an efficient, transparent and independent method of selling dairy products internationally. MG is now the third participant in GDT alongside Fonterra, the largest provider of globally traded dairy products, and the largest American milk powder provider, Dairy America. Recognised as a world-class supplier of dairy ingredients and retail products for over 60 years, MG processes about one third of Australia’s milk supply sold on the domestic and international market. MG manufactures and markets a full range of dairy ingredients including skim milk powder, full cream milk powder, cheese, milk fat products, whey powders and milk proteins. GDT General Manager, Paul Grave, said MG’s decision to offer lactose was a significant step for GDT as it adds a new product to the platform that is not currently offered by existing sellers. “This demonstrates GDT’s increasing role as a key platform for international trade in a broad range of dairy commodities. We are delighted that a company of MG’s standing and importance in world dairy markets has decided to participate in GDT and play a part in shaping its future,” Mr Grave said. GDT began in July 2008 and is a multi-seller, multi-product, twice-monthly auction to efficiently and transparently discover a fair, market clearing price for globallytraded dairy food ingredients. GDT sales to date total more than USD $5 billion. It currently trades around 700,000 metric tonnes of products annually and has around 500 qualified bidders from more than 80 countries. More information about MG’s product available on GDT will be provided to prospective customers in the lead up to formal participation in April 2012.

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The Dairy Australian - February 2012

United Dairy Power’s South Australia deal complete Kirin-owned dairy and beverage manufacturer, Lion (formerly Lion Nathan National Foods) has finalised the sale of its Murray Bridge and Jervois cheese manufacturing sites in South Australia to United Dairy Power (UDP), as going concerns. UDP officially took control of both sites at the end of January, and has commenced supply to the market place. Through the sale, UDP will also become the owner and manufacturer of Caboolture brand mozzarella, Australia’s leading pizza cheese, manufactured at Jervois. UDP plans to increase productivity of the factories from 140 million litres to 300 million litres with a specific focus on cheese manufacturing, in particular the Caboolture brand. The Murray Bridge site supplies a diverse range of products from cheddar cheese, through to hard grating cheese, in bulk and rounds. Murray Bridge also makes a number of value added dairy products. UDP and Lion have entered into a contract pack arrangement to continue to manufacture cheese, sour cream and Le Rice products on Lion’s behalf. The sale of the South Australian sites continues Lion’s rationalisation of its manufacturing and processing plants. In March 2011 the company announced it would invest $132 million into cheese manufacturing in Tasmania, with the creation of a modern, high volume specialty cheese manufacturing facility in Burnie. All specialty cheese manufacture, other than King Island brands, will be consolidated into a single site. A 25,000 tonne per annum cheese making capacity is planned for the Burnie site. The company will continue to manufacture King Island brand products on King Island and will invest a further $12 million there.

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The Dairy Australian - February 2012

Grape marc proves a winner for farmers and the environment Australian scientists have discovered a novel way to significantly decrease methane emissions from cattle and improve the nutritional value of milk – thanks to a wine industry by-product. Researchers fed cattle the stems, seeds and skins from wine grapes (known as grape marc) for just over a month and found that as well as slashing cattle methane emissions by 20 percent the diet also increased healthy fatty acids in milk. The grape marc diet also increased the concentration of linoleic acid in milk, a fatty acid known for its ability to fight cancer, diabetes and arthritis. The experiment was the culmination of a three-year project investigating ways to reduce methane emissions from dairy cows. Methane is a potent greenhouse gas, 21 times more powerful than carbon dioxide in terms of it global warming potential. Leading the study was the Victorian Department of Primary Industries scientist, Dr Peter Moate, who said the results were significant as it was the first study of its type. With the carbon footprint of export products coming under greater scrutiny the research may prove invaluable in the future for the dairy industry, Dr Moate said. Earlier research on cotton seed and brewers grains found those high-fat fodder supplements reduced methane production in cows, so using scientific deduction the research team went on to trial the grape marc as a higher fat feed supplement. Dr Moate said that the trials were so successful that it should be possible to reduce methane emissions from cattle even further. “We are heartened by the fact that something that was previously a waste product can now be utilised for farmers for the productive and efficient milk production so it is a wonderful win-win for the farmers and for the environment,” Dr Moate said. Currently 250,000 tonnes of grape marc are produced in Australia each year. For further information contact Dr Peter Moate at [email protected] 4

The Dairy Australian - February 2012

Victorian Department of Primary Industries’ scientist, Dr Peter Moate

Jerseys lead the way at International Dairy Week The Jersey breed was a standout at the 21st International Dairy Week (IDW) held in Victoria in January with a jersey cow taking the Australian grand champion award for the first time. IDW is the largest annual dairy cattle show and sale in the Southern Hemisphere, showcasing the best quality dairy cattle to over 4,000 visitors from every state in Australia and over 20 countries internationally. In 2012, IDW hosted more than 1200 cattle over six breeds during the four-day event held in the town of Tatura. Alongside the Australian Supreme All Breeds Champion Cow award – won by a Jersey named Willow Dell Fancy 512 – Jersey cows also featured prominently in the National Youth Show. The Jersey Showcase Sale also saw a Jersey breed record set with an average sale price of $5,032. IDW Director, Brian Leslie, said there had been many great exhibitions of the Jersey breed at IDW and many people associated with the breed said 2012 was the best year ever. Mr Leslie said across the six breeds there were strong entries and judges had been greatly impressed with the cattle exhibited. Canadian Roger Turner who judged the Holstein breed said he was overwhelmed by the depth and quality in each class. “The show cattle preparation and presentation was amazing. It is a great accomplishment that Australia has had an impact on the world breeding front and with its leading combination of great people and great cows it is easy to see that Australia will continue to be a leader worldwide for generations to come,” Mr Turner said. The top-priced Holstein heifer was an 18 month old that was sold at the event for $28,000. Overall, the sale average price at IDW was $8,303. More than 150 international visitors attended the event from around the world including Switzerland, Canada, USA, New Zealand, Kenya, Argentina, Malaysia, The Philippines and Malaysia. Dairy Australia Managing Director Ian Halliday addressed a group of 65 international visitors informing them about the Australian dairy industry. The event also offered workshops where visitors could learn the latest about genomics, fertility, pastures, and the financial and economic outlook for the dairy industry. For further information about IDW visit www.internationaldairyweek.com.au or email [email protected] Australia’s Supreme All Breeds Champion, Willow Dell Fancy 512, with Ian Griffiths and Lauren Norman. The Jersey is owned by the Eloora Pastoral Company of Blighty, New South Wales. 5

The Dairy Australian - February 2012

Australian cheeses triumph at global awards Australia’s Berrys Creek Gourmet Cheese won the gold medal in the Blue Vein category at the annual Guild of Fine Foods World Cheese Awards in November. ‘Mossvale Blue’, already a multi-award winning blue cheese, was also named ‘Best Australian Cheese in Show’ at the awards held in Birmingham, UK. The award follows Berrys Creek Gold Medal triumph at the World Cheese Awards in Spain in 2009 for the highly acclaimed Tarwin Blue. The Guild of Fine Foods World Cheese Awards is the largest cheese competition in the world, with 200 judges sampling cheeses from over 2500 entries from 34 countries.

The Guild of Fine Foods World Cheese Awards also saw Australian cheese making a mark in traditionally European categories. Multi award-winning Australian specialty cheese manufacturer Jindi also struck gold, winning international acclaim with two gold medals. Jindi’s washed rind Fire Engine Red won the only gold in the Pont L’Eveque, Livarot category, while Heritage Blue was also awarded gold. A title winner in 2009, Jindi Fire Engine Red was awarded the highest score in the category, overcoming French cheeses in another win for Australian manufacturing.

Berrys Creek ‘Oak Blue’ was also entered into the Blue Vein category and came away with a Bronze Medal.

Privately owned and one of the largest Australian specialty cheese makers, Jindi Cheese is located in the heart of the Victorian dairy belt in West Gippsland.

Since opening its doors in 2007, the company has won more than 40 medals and awards from around Australia and overseas for its gourmet farmhouse cheeses.

Jindi CEO, Normandy-born Franck Beaurain, said the results were enormously satisfying.

Located in the small dairying town of Poowong in the South Gippsland region of Victoria, Berrys Creek Gourmet Cheese is owned and operated by cheese-maker of 37 years, Barry Charlton, and his partner Cheryl Hulls.

The veteran cheese artisan joined the company three years ago to focus on washed rind manufacture.

Mr Charlton said his cheeses were all handcrafted and used very high quality milk. His cheese making experience was another vital part of the success. “There is a lot of passion that goes into the cheese making process here, it’s made with love and is all hands on.” He said Australian cheeses were not recognised enough. “Australian cheeses are up there with the best in the world and we have the awards to prove it.” Berrys Creek’s Mossvale Blue has been served exclusively to first class passengers flying QANTAS, while Tarwin Blue has delighted QANTAS lounge members.

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The Dairy Australian - February 2012

“It really does show that Australian cheeses can be competitive on the world stage, especially given the range of cheeses we were competing against. I am very proud of this recent award and attribute our success to our superior raw produce sourced locally, our amazing facilities and our dedicated and dynamic team”, Mr Beaurain said. “As a team, we are passionate about our craft and have nurtured our cheeses to create the very finest quality and flavour. Jindi Fire Engine Red and Heritage Blue are stunning examples of our efforts.” For more information about the award winners visit www.berryscreekcheese.com or www.jindi.com.au

The stage is set for the Australian Grand Dairy Awards Australia’s finest dairy products will be honoured at the 2012 Australian Grand Dairy Awards (AGDA) in Melbourne in March. The most prestigious event on the Australian dairy industry calendar sees more than 330 cheese and dairy products evaluated on their appearance, texture and flavour to find the ‘best of the best’ in Australian dairy produce. The awards comprise of 19 product classes, grouped into two categories - Cheese and Dairy Products. The winner of each of the product classes is awarded a Gold Champion medal. The two highest scoring products across all the classes in both the Cheese and Dairy Product categories are awarded a Grand Champion royal blue medal. The prestigious AGDA gold and royal blue medals assist consumers to identify the very best in dairy; representing excellent quality and good taste in Australia’s world class dairy products. Manufacturing scholarships and awards in education, manufacturing and innovation are also a feature of the awards. French cheese-making expert, Professor Eric Spinnler of AgroParisTech, assisted in the AGDA judging process this year and joined17 Australian food professionals and technical experts to select the winners. With more than 25 years of experience in cheese-making, Professor Spinnler has been a regular visitor to Australia to share knowledge and provide advice to the industry. The judging group is headed by cheese consultant and educator Neil Willman who has been AGDA’s chief judge since the inception of the awards in 1999. “Each year we see some superb dairy products coming through,” Mr Willman said. The winners will be announced at an official presentation in Melbourne on 14 March.

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The Dairy Australian - February 2012

Category details 2012 Category - Cheese

Category – Dairy Products

Class 1 Fresh Unripened Cheese

Class 10 Natural Yogurt

Class 2 White Mould Cheese

Class 11 Flavoured Yogurt

Class 3 Semi – Hard / Eye Cheese

Class 12 Ice Cream

Class 4 Cheddar Style Cheese

Class 13 Dairy Gelato

Class 5 Hard Cheese

Class 14 Dairy Dessert

Class 6 Blue Cheese

Class 15 Milk

Class 7 Washed Rind Cheese

Class 16 Specialty White Dairy Drink

Class 8 Flavoured Cheese

Class 17 Flavoured Dairy Drink

Class 9 Goat’s or Sheep’s Milk Cheese

Class 18 Cream Class 19 Butter or Butter Blend

If you want to find out more about AGDA visit www.dairyaustralia.com.au

Dairy’s link to sport nutrition Dairy Australia is working in partnership with the Australian Institute of Sport (AIS) on a new campaign promoting the health benefits of milk for exercise and sports performance. The campaign features Beijing Olympic Games gold medal winning rower David Crawshay who will be spreading the message about the importance of milk for physically active young people aged 18 – 35 years. The campaign called ‘Milk the moment’ also features international walker Jess Rothwell and will commence in March. The partnership with the AIS is the cornerstone of a program of work by Dairy Australia to increase the awareness of milk’s beneficial role in sport performance. Dairy Australia dietitian Glenys Zucco said a growing body of evidence is showing that milk is one of the best liquids for rehydration and recovery after exercise. “Flavoured milk contains an ideal balance of fluid, carbohydrate and electrolytes, and has been shown to be as good as, or better, for rehydration and recovery than water or commercially available sports drinks. ”Milk’s unique combination of whey and casein protein, which play an important role in muscle growth as well as recovery from exercise, is another plus for athletes.“ Mr Crawshay drinks litres of milk a day for energy and recovery. He won the gold medal in the men’s double sculls at the 2008 games, with teammate Scott Brennan, and is currently part of the wider Australian rowing squad that will go through a selection process in the lead up to the 2012 London Olympic Games. “As an athlete, dairy is what I wake up to, and what I go to bed with,” he said. An endurance walker, Ms Rothwell was raised on a dairy farm in north-eastern Victoria and uses dairy foods as a recovery aid “Milk gives me the proteins I need for muscle repair and may even help me to be better at burning fat. For me it’s the natural choice,” she said. Ms Zucco said whether you are an elite athlete or a competitive amateur, milk and dairy products can help you get the most out of your exercise or sport.

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The Dairy Australian - February 2012

Sarah Xu – International Market Manager Sarah Xu is one of Dairy Australia’s most experienced trade representatives working in Greater China, Hong Kong, Taiwan and the Middle East markets. This year she will again visit countries in these regions to present seminars offering information including global market updates, Australian dairy industry news and a showcase of Australian dairy products. Sarah says the seminars are an excellent way to keep the Australian dairy industry connected to these regions and in particular highlight the quality food safety standards Australia upholds. This year Dairy Australia has developed two recipe books specifically for the Middle East and Asian regions. Dishes will be created using the recipes that feature Australian dairy products, for buffet lunches and evening cocktail seminars. Sarah was born in the Chinese city of ChongQing, and joined Dairy Australia in 2000 when the organisation was known as the Australian Dairy Corporation. A fluent mandarin speaker, Sarah’s first region of focus was Mainland China but her role has since spread to include Greater China, Hong Kong, Taiwan and the Middle East. In February she will attend the Gulfood trade show in the Middle East followed by a seminar series across China in April. “I find it very interesting working overseas. The audiences are always a wide range of people including representatives from manufacturers, the bakery industry, trading companies, food service, restaurants and hotels. “I enjoy getting out and meeting people from all over the world,” she says. Sarah has managed the annual Greater China Dairy Scholarship programme for the past decade that has established strong bonds between the dairy industries in Greater China and Australia. Scholarship alumni meet annually in Greater China to discuss the latest dairy industry news and events. Family life is important to Sarah and she says being away from her children is the most challenging aspect of her role. Sarah is looking forward to meeting contacts she has built up over previous years and will continue to build relationships in Asia and the Middle East on behalf of the Australian dairy industry in 2012.

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The Dairy Australian - February 2012

International dairy dates Super Trade Mission to the Middle East in conjunction with the Victorian State Government

Doha, Qatar



Wednesday 15 Feb



Dubai, UAE



Sunday 19 Feb



Riyadh, Saudi Arabia



Saturday 25 Feb



Jeddah, Saudi Arabia



Tuesday 28 Feb

Japan

Tokyo Alumni Dinner

Monday 26 March



Tokyo Seminar and Reception

Wednesday 28 March



Osaka/Kobe Alumni Dinner

Friday 30 March

China seminars

Shenzhen



Hangzhou



Friday 6 April

Tuesday 10 April

South East Asia seminars May 21 – June 8 (dates to be confirmed) Singapore Jakarta, Indonesia

Bangkok, Thailand

Manila, Philippines



Kuala Lumpur, Malaysia

Hanoi, Vietnam

For more information about Dairy Australia’s Japan and South East Asia visits please contact Katie Porter: [email protected] For more information about Dairy Australia’s Middle East and China visits please contact Sarah Xu: [email protected] More dates will be added in 2012.

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The Dairy Australian - February 2012

Twice Baked Cheddar Soufflé with Walnuts, Grapes and Balsamic Glaze (makes 20) Cheddar Souffle melted Australian butter, for greasing plain flour, for dusting 120g Australian butter, extra 120g plain flour, extra 700ml Australian milk 250g Australian vintage cheddar, finely grated 50g (6) egg yolks 150g (8) egg whites 500ml Australian thickened cream 200g Australian vintage cheddar cheese, finely grated, extra Grape and Walnut Salsa 200g seedless red or green grapes, quartered 60g walnuts, finely chopped 20g fresh chives, snipped into lengths 200ml sweet balsamic glaze, to serve For cheddar souffle 1. Lightly brush 20 x 75-100ml ramekins or dariole moulds with butter. Coat lightly with flour, dusting out any excess. 2. Melt butter in a medium sized saucepan, stir in flour and cook stirring for 1 minute until smooth. Slowly whisk in the milk and continue stirring until mixture thickens and boils. Remove from heat and stir in cheese and yolks. 3. Whisk egg whites until soft peaks form gently fold into the cheese mixture until just combined. Spoon the mixture into prepared moulds. 4. Place moulds into a large deep baking dish and half fill with boiling water. Bake at 180°C for 12-15 minutes, until puffed and golden. Cool to room temperature before inverting onto a baking paper lined tray, cover and refrigerate until required. 5. Before serving, pour cream over each soufflé, sprinkle with extra cheese and bake at 180°C for 5-10 minutes until golden brown. 6. To make balsamic glaze simmer 250ml balsamic vinegar with 40g sugar for 10 minutes until thick and syrupy. For grape and walnut salsa 1. Gently toss all ingredients together in a bowl. To Serve 1. Serve warm soufflé and drizzled with sweet balsamic and top with grape salsa.

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The Dairy Australian - February 2012

Australian Milk Production - July to December 2011 Million Litres Million Litres 1200 1,200 2010/11

2010/12

1000 1,000

800

600

400

200

Australian production summary Generally favourable seasonal conditions, lower feed costs, good soil moisture levels and high irrigation allocations are supporting on-farm profit margins; making this season one of consolidation for most dairy farmers in the southern exporting regions of Australia. Australia’s milk production was over three percent ahead of last season for the six months to December - at 5.3 billion litres. Milk prices remain relatively firm and the milk/grain price ratio is positive and expected to remain so for some time, so that it is likely that milk flow will remain strong in coming months. Consequently, Dairy Australia has lifted its forecast milk production volume for the 2011/12 season to 9.4 to 9.5 billion litres – which reflects a growth rate of around three to four percent on last season. Step-up payments to southern farmers for the season to February represent a smaller proportion of the opening price than in recent years. This suggests a return to a more traditional pattern of step-ups and is in line with the less volatile international market conditions that have prevailed in 2011/12 compared to recent years. Current modelling suggests a likely final average southern price range of $5.20 to $5.30 per kilogram of milk solids for the current season. This estimate is only indicative, as the proliferation of alternative payment systems means individual farmer payments could vary greatly around this average. Production volumes of skim milk powders and whey powders have been about five percent ahead of last year at the halfway point of the season. Cheese volumes have shown a very slight increase; while wholemilk powders are down four percent and butter/butteroil volumes are down five percent over the period. Within the cheese category, fresh cheeses have shown significant growth, as stretched curd and cheddar cheeses have contracted.

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The Dairy Australian - February 2012

0

Jul

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Australian Production Figures - July to December 2011 000 tonnes 180,000

2010/11 2010/12

160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 -

WMP

SMP/BMP

Butter/Butteroil

Cheese

Whey Products

Australian Cheese Production - July to December 2011 100,000

000 tonnes 2010/11 2010/12

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Cheddar

Fresh

Hard

Mould

Semi Hard

Stretch

International market summary

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The Dairy Australian - February 2012

5,000

4,000

Butter

3,000

SMP WMP

2,000

Cheddar

1,000

Jan-12

Jul-11

Please print chart only, data supplied in accompanying Excel worksheet.

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

0 Apr-09

Meanwhile in the Southern Hemisphere, NZ milk production could grow by 8-10 per cent and Australian milk production is forecast to increase 3-4 per cent this season. Milk production in South America has been particularly strong. Argentina and Uruguay are expecting double digit milk production growth, while growth in Chile and Brazil is more modest at 5 per cent and 2 per cent respectively. Poor seasonal conditions have hampered milk production in parts of Brazil, but strong economic growth and rising incomes is providing a boost to local demand. This demand growth is expected to absorb most of the increased milk volume from South America.

6,000

Jul-08

Milk production in the EU continues climbing modestly. For the production quota year (April to March) to date, EU-27 manufacturers received 90.5bn litres, up 1.6 per cent on the 89bn litres produced during the same period in 2010/11. During November (most recent production information available), production in the five largest EU milk producers (France, Germany, Italy, UK, Netherlands) was 6.9bn litres, up 1.9 per cent on November 2010.

been strong enough to absorb the growing volume of product on the global market. The key issues driving dairy commodity markets in coming months are the extent to which current weather patterns and high US feed prices affect milk production.

Oct-08

Buyers are monitoring the production environment which has been quite positive over the last six months. In the US, milk production finished the 2011 calendar year up 1.8 per cent to 86.4bn litres from the 84.9bn litres produced in 2010. US production growth slowed from April to July, but ramped up quickly toward the end of the year as both cow numbers and production yields increased. The USDA expects milk flows to increase a further 1.2 per cent to 87.4bn litres this year as farmers retire old cows and tap into the three million replacement heifers expected to come into the US herd this year. In comparison, the Australian dairy herd was 1.6 million head last season.

Economic problems and a strong supply environment continue to be the major issues driving global So while US and Eurozone issues have sapped some confidence dairy markets. However, commodity prices have been remarkably steady considering the EU is still from dairy markets, demand has remained steady. The main reason working on a plan to address its debt crisis and strong milk production in the US, South America and behind the gradual decline in commodity prices is that demand hasn’t New Zealand.

Jan-08

Milk powder and cheese markets have gradually declined from the middle of 2011, cheese prices are trading at similar levels (US$4,300/t) compared to January 2011, while milk powder prices between US$3,300/t and US$3,700/t are down 7 per cent from the beginning of last year.

Apr-08

During January spot contract prices were steady for cheese and milk powders although butter came under some pressure. For butter, the majority of trade has continued above US$4,000/t since November 2011, but heavy supplies of cream and Cooperatives Working Together (CWT) subsidising almost 5,000t of butter exports have undermined short term market confidence.

Economic problems have persisted despite the best efforts of EU and US officials. While early signs of a recovery are emerging from the US, the EU is mired in economic problems after a series of halfsolutions have failed to turn faltering economies around. Growing downside risks have prompted the International Monetary Fund (IMF) to cut world economic growth expectations in 2012 by 0.75 per Int Marketing The Dairy article - February 2012 for dairy prices; the IMF cent to– 3.25 perAustralian cent and more importantly flagged the possibility of weakening internal demand in developing economies.

US$/tonne FOB

Economic problems and a strong supply environment continue to be the major issues driving global dairy markets. However, commodity prices have been remarkably steady considering the EU is still working on a plan to address its debt crisis and strong milk production in the US, South America and New Zealand.

The DairyAustralian is available in Korean, Chinese, Japanese and English languages. If you would like to receive a copy of The DairyAustralian or further information on any of the articles, please contact Ms Katie Porter at Dairy Australia on [email protected]

ISSN 1839-8812 Published by Dairy Australia Limited. Whilst all reasonable efforts have been taken to ensure the accuracy of The Dairy Australian, use of the information contained herein is at one’s own risk. To the fullest extent permitted by Australian law, Dairy Australia disclaims all liability for any losses, costs, damages and the like sustained or incurred as a result of the use of or reliance upon the information contained herein, including, without limitation, liability stemming from reliance upon any part which may contain inadvertent errors, whether typographical or otherwise, or omissions of any kind. © Dairy Australia Limited 2012. All rights reserved.

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