Oceania Dairy Market Overview

MADISON - Mar 31/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk producers and handlers in Oceania are now looking at
the end of the milk production season.  Although the season is still a few
months away, most feel that their hopes for production recovery during the
last half of the season have not developed as desired.  At this point, milk
output in New Zealand continues to run between 4 - 5% behind last year.
Although output has recovered somewhat in recent months in Australia, many
producers and handlers feel that overall production will be about 1% lower
than last year.  Lower annual production has limited and continues to limit
product availability for buyer needs.  Manufacturers and traders continue to
indicate that stocks are in very close balance and often short of full needs.
Some traders and handlers are looking to outside sources for additional stocks
to fully acknowledge commitments, while others are considering reaching into
the new production season later in the year.  Oceania producers and handlers
are closely monitoring international markets and prices with some considering
adjusting their pricing structure to remain competitive.  At this point,
prices remain firm, although a weaker undertone is developing.  Trader and
handlers do not foresee significant declines, although many anticipate lower
prices.  Traders indicate that international buyer interest is being reported,
but also state that they have no uncommitted inventories to acknowledge any of
this interest at this time.  For the most part, producers and handlers
anticipate very minimal volumes of product to carry over to the new season, if
any at all.

0930c steve schneeberger  (608)224-5084

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STAT News Service