Oceania Dairy Market Overview

MADISON - Mar 17/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production continues to edge lower in both New Zealand
and Australia.  Milk output in New Zealand continues to trail last season
between 3 - 4%.  Milk producers and handlers still remain optimistic that the
second half of the season will generate additional volumes to help make up the
deficit of the first half.  As milk volumes decline, reports indicate that the
last half of the season is not negative, but milk output is not as strong as
hoped.  In Australia, milk volumes are also trailing last season, although the
margin between the two years is narrowing.  For the first seven months (July -
January) of the current milk production season, milk output is 0.7% behind
last year.  In Victoria, Australia's major milk production state, production
has been positive for the past two months in comparison to last year.  Milk
producers and handlers are hopeful that this trend will continue and, at
least, generate enough additional milk to bring the country's total for the
year back in line with last year.  Stocks of manufactured dairy products
remain in very close balance to short of full needs.  Some suppliers and
traders are looking to outside sources to acquire additional stocks to fulfill
their commitments.  As the milk production season winds down, many Oceania
manufacturers are looking at their milk volumes versus product mix.  Some
adjustments are being made to make best use of the declining supply.  When
possible, reports indicate that cheese and whole milk powder production
appears to be getting the major share of milk diversions with butter/skim milk
powder, especially butteroil, loosing ground.

0930c steve schneeberger  (608)224-5084

---

STAT News Service