Oceania Dairy Market Overview

MADISON - Jun 9/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Oceania is basically at seasonal low
levels.  The winter season is now at hand and other than minimal year round
producers for drinking milk needs, milk output has ceased for the next few
months.  Many producers and handlers in both New Zealand and Australia are
concerned about what the new milk production season will bring.  Conditions in
both countries during the recent year were not positive for one reason or
another.  New Zealand did not have a good start to the season due to excess
moisture, while Australian producers continued to slowly recover from recent
drought years.  As the season in Australia comes to an end, lack of moisture
continues to be a concerning factor.  Continued limited moisture in Australia
and temperatures that are warmer than usual for this time of the year are
adding additional outlook pressures.  Official annual milk production reports
have not been finalized, but handlers and producers continue to feel that
output will be 3 - 4% lower in New Zealand and even to 1% lower in Australia.
Manufacturing facilities in both countries have now ceased production
schedules or are in the final days of shutdown.  Stocks of manufactured dairy
products have been limited all year long in Oceania and now that new product
production has ceased, handlers and traders are working from inventoried
stocks.  In many instances, these stocks are much lighter than desired thus
they will be looking to multi-origin sources and early output during the
upcoming new production season to fulfill current commitments.  For the most
part, product prices are unchanged, although handlers and traders are closely
monitoring the impact recent subsidy cuts in Europe might have on milk powder
prices for international needs.

0930c steve Schneeberger  (608)224-5084

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STAT News Service