Oceania Dairy Market Overview

MADISON - Apr 14/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The Oceania milk production season continues to wind down.
Many milk producers and handlers are now stating that it does not appear that
the second half of the production season will generate additional milk volumes
that were not attained during the first half of the season.  Although there
are still 2 - 3 months left of the official season, handlers feel that a spurt
in output will not be significant enough to offset the declines.  Milk
production reports continue to indicate that New Zealand's output is running 4
- 5% behind last year with Australia's output lagging last season by 0.9%.  In
New Zealand, milk handlers are stating that the strong growth in dairies in
recent years, especially on the South Island, has slowed.  This slower trend
and weather conditions that were less than desirable early in the season are
two factors that they attribute to lower milk output.  In Australia, through
February (8 months) on a cumulative basis, milk production in Victoria and
Tasmania is up 1.0 and 1.7% respectively although all other dairy regions of
the country are down as much as 9.9% in Queensland and 5.4% in New South
Wales.  Stocks of manufactured dairy products are still tight with very little
product left uncommitted.  Prices remain firm, although some softening is
appearing as the European milk production season is just getting underway and
supplies are increasing.  Oceania traders and handlers feel that world prices
will probably adjust slightly lower, but do not anticipate significant
declines.  Supply availability is the main question at this time.  Oceania
suppliers and international buyers know Oceania's supply situation, thus
traders feel that many international buyers are waiting for European supplies
to become available.  Some traders feel that international buyers may return
to the market earlier this year for their needs and secure a supply versus
delay their decision making for favorable prices.

0930c steve schneeberger  (608)224-5084

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STAT News Service