Oceania Dairy Market Overview

MADISON - May 26/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The milk production season in Oceania continues to wind
down.  The milk production year in New Zealand will conclude at the end of
May, with preliminary annual output estimates trailing last year by 3 - 4%.
A slight up-tick in production did occur at the end of the season, although
not significant enough to reduce the decline as much as hoped.  In Australia,
milk volumes are also declining as their milk production season has one more
month to go before the official end of the year.  Most recent production
figures (9 months) indicate that output is still trailing last year by 0.3%,
although reports for some regions, especially Victoria, indicate that late
season strength is helping narrow the negative gap.  Lack of moisture in
Australia continues to be a concern for many producers.  Due to this, some
farmers and processors are already preparing for another tough year.
Manufacturing schedules in both New Zealand and Australia are also sharply
lower.  In New Zealand, with milk volumes at or nearing seasonal low levels,
most plants are now close for the next few months with year round bottling
operations maintaining steady schedules.  Australian operations are winding
down and are basically on track with last year at this time.  Stocks of
manufactured dairy products remain short of full needs.  Suppliers and
handlers indicate that they will basically be fully cleaned out once the new
milk production season returns, thus, most will not have any surplus product
available for spot or additional late season buyer interest.  Some suppliers
state that they will be tapping into ongoing multi-origin supply sources to
round out the sales year, while others are looking at committing some of next
season's stock already.

0930c steve Schneeberger  (608)224-5084

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STAT News Service