Oceania Dairy Market Overview

MADISON - Jul 21/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Producers and handlers in Oceania are preparing for the
start of the new milk production season which is about to get underway during
the next 4 - 6 weeks.  At this point, milk production is seasonally low and
continues to center around a domestic drinking milk need.  Producers and
handlers in both New Zealand and Australia are optimistic about the upcoming
season.  New Zealand producers are projecting a 2 - 3% increase over last year
which will basically get them back to levels of two years ago.  Australian
producers remain equally positive, although no early season projections are
being estimated at this time.  Winter weather conditions and moisture levels
during the down time of the season will be major contributing factors in how
strong the year begins.  Many producers state that the winter has not been too
unfavorable.  Needed moisture in some dairy areas has occurred in recent
weeks, but still remains limited in others.  Handlers and traders continue to
work down inventories to meet customer needs.  In many instances, these stocks
will be fully consumed and some new production might be needed to fully fill
previous commitments.  Traders indicate that much of the early season's new
production is already committed with a large percentage of this stock going to
regular and ongoing customers.  Traders state that there is limited buyer
interest outside of this regular need, although they feel that the
international market will be closely monitoring developments in the Oceania
region.  Oceania traders state that how the upcoming milk production season
develops will greatly influence the tone for future international supplies and
prices.

0930c steve Schneeberger  9608)224-5084

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STAT News Service