Oceania Dairy Market Overview

MADISON - Sep 1/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The 2005 - 2006 milk production year in Oceania is off to a
positive start.  Milk producers and handlers in New Zealand are indicating
that output appears to be slightly ahead of last year at this time.  It is
still too early for any official milk production reports, although projections
remain unchanged for a 4 - 5 percent increase over last season, which would
basically get New Zealand's output back to levels of 2003 - 2004.  In
Australia, the season is just beginning and is a few weeks behind New
Zealand's.  Producers and handlers in Australia continue to project a 1 - 1
1/2% increase over last season.  Australian producers are hopeful that the
production strength at the end of the 2004 - 2005 season will be the impetus
for a positive start to the new year.  As milk volumes increase, manufacturing
facilities are gearing up their operations to handle the milk flow.  At this
time, stocks of manufactured dairy products remain light, with minimal volumes
of new production clearing the region.  Carry over stocks from last season are
minimal, but traders and handlers feel that the safety level of carryover
stocks is often at desired levels.  Although there are carryover volumes,
handlers and traders state that they have no carryover volumes for spot sale.
New international buyer interest remains absent for most Oceania traders.
Traders indicate that they anticipate this to be the case for much of the
early part of the new production season or at least, until they have a better
opinion on how the supply is covering committed and projected needs.

930c Steve Schneeberger (608)224-5084

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STAT News Service