Oceania Dairy Market Overview

MADISON - Jan 6/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Oceania milk production trends continue to follow those of
previous weeks.  Milk output is on the down side of the season in both New
Zealand and Australia.  No new production reports have been officially
released in recent days, although milk handlers and producers are indicating
that milk volumes are trailing last year in both countries.  Milk handlers
remain optimistic about the second half of the season and are hopeful that
milk production will not decline too rapidly and last half of the season
production will be able to make up some of the first half loss.  The year end
holidays continue to influence market activity.  For the most part, no new
sales activity is being reported and stocks of manufactured dairy products in
Oceania remain limited and tight.  Most stock is fully committed to regular
and ongoing customer needs.  Traders and exporters in Oceania are commenting
on the influence the Tsunami disaster is having on dairy export activity.  At
this point, for the short term, there may have been some minimal impact of the
food service sectors in the affected countries.  Long term, the concern is
what impact the disaster has on the economics.  Traders state that there is a
strong correlation between the economic well being and demand in most Asian
countries and most remain quite buoyant about the outlook for the Asian region
but the disaster could hit hard.

0930c steve schneeberger  (608)224-5084

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STAT News Service