New Zealand dairy exports to China for the 10 months to
October have virtually matched full-year 2011 exports, with
two months still to go.
The latest Rabobank agribusiness report showed 463,000 tonnes
were exported in the 10-month period, compared with 467,000
for 12 months last year.
China continued to dominate export destinations, up 9000
tonnes (or 27%) compared with October last year.
The Chinese also started the 2012-13 sheepmeat season on a
strong note, importing more than double the volume from New
Zealand than in October 2011.
China overtook the United Kingdom as the key export
destination for New Zealand lamb and mutton in the 2011-12
season (on a volume basis), importing about 62,000 tonnes
from October 2011.
Export milk volumes through October tracked production flows
and were up 5%-6%. The export product mix altered to favour
cheese and skim milk powder proportionally a little, as more
attractive pricing had been available relative to whole milk
powder, the report said.
Dairy prices posted modest gains in this week's
GlobalDairyTrade auction, increasing 1.1% on a trade-weighted
The increase partially reversed the last auction's 2% fall.
Compared with the May lows, dairy prices were now about 28%
However, the auction was mixed across products, with rises
interspersed with falls, and a rise in the New Zealand dollar
eroded all of the gains, Westpac economist Nathan Penny said.
Volatile cheddar and casein recorded large rises of 4.9% and
6.9% respectively, explaining much of the overall rise.
Benchmark whole milk prices fell 0.6% while skim milk powder
lifted 1.1%, Mr Penny said.
In Australia, the 2012-13 seasonal flush had passed and
production growth had come in below expectation, mostly due
to wet weather in parts of Victoria, the Rabobank report
A gradual recovery improvement in commodity prices was also
expected to help deliver farmers a full-year price of close
to $A5 per kilo of milk solids.
North Island and South Island lamb prices fell by 58c and 55c
respectively during November. The total number of lambs
slaughtered in October increased by 44% year-on-year to 1.5
South Island slaughter was 57% larger than in October 2011 at
663,000 head, although average carcass weights were 6% lower
year-on-year at 19.9kg.
The total volume of sheep meat exported to Europe increased
by 25% year-on-year in October to about 8600 tonnes,
although, on a value basis, remained 10% lower year-on-year
for the month.
That provided some evidence of clearing inventory levels from
last season at the lower prices, the report said.
The seasonal lift in demand before Christmas, coupled with
limited lamb production in the UK and an increase in supply
availability from Oceania, helped to support growth in the
volume of European sheepmeat imports in recent months.
The strong start to the beef processing season, with
slaughter rates up 43% year-on-year, was a result of drier
conditions on the east coast of the North Island.
Exports to the United States were up 5% year-to-date compared
to 2011, while exports to China were up 176%, now sitting at
The largest decline in exports continued to be Indonesia. The
dramatic decline (down 58% year-to-date) was the result of
the Indonesian government continuing to limit permits through
its push for self-sufficiency.