The Mintec price for Oceania cheddar increased 9% m-o-m and 14% y-o-y in April. The April price is 20% above prices at the start of the Oceania 2018/19 season in September and is 36% above the November 2018 price when Oceania cheddar prices dropped to their lowest point of the dairy season.
With the Southern Hemisphere approaching winter, the Oceania dairy season has passed its peak and is heading for a period of low production. The tightening availability of milk is increasing dairy product prices as traditionally expected. However, the surge in prices in April has been accentuated by the hot and dry weather in New Zealand, as written about recently, as well as disappointing Australian milk production results.
Australian production continues to be inhibited by drought. Expensive hay in Northern and Southern Australia has been caused by the hot and dry season limiting supplies which is increasing input costs for farmers. Export demand for Oceania cheese has remained strong and so profitability for cheddar-making is strong.
For the first time since June 2017, Oceania cheese prices have risen above those of the US and the EU. The high prices have caused some buyer resistance and so demand is likely to drop off in coming weeks.