Oceania Dairy Market Overview

MADISON - Jul 18/02 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA

OVERVIEW:  The winter season is winding down as milk producers and handlers 
look forward to the upcoming new production season which will be getting 
underway in about 4 weeks in New Zealand and 6 in Australia.  For the most 
part, the winter season has been typical for both countries, although moisture 
conditions vary.  In New Zealand, moisture has been plentiful while limited in 
Australia.  Milk producers are concerned about early pasture conditions in 
both countries.  Too much moisture in New Zealand may cause a soggy base for 
grazing and could limit early growth, with dryer conditions in Australia also 
limiting overall growth.  It is still too early to project what overall milk 
production patterns will be in the Oceania region during the upcoming season. 
Some producers and handlers are questioning what impact the announcement of 
lower opening season milk prices will have on production and management 
decisions.  Although these prices are lower than last season, they are 
comparable with opening season prices of past years.  Stocks of Oceania 
produced dairy products continue to decline as orders and shipments are filled 
from inventoried supplies.  Handlers and traders indicate that supplies are in 
balance with needs and most are comfortable with their supplies in relation to 
the start of the new milk production season in a month or so.  Reports 
indicate that a significant portion of early season milk production and 
subsequent manufactured dairy products have been spoken for.  The recent 
subsidy adjustment in Europe is not having a significant impact on current 
prices, although new season production values are the concern.  Handlers and 
traders are not overly optimistic about early season prices and many do not 
foresee much strength in the market place for quite some time.  Traders also 
state that although the DEIP program in the U.S. has not been announced as of 
yet, when announced, this too will add a weak tone to Oceania markets, at 
least until the allocations have been filled.  

0930c steve schneeberger  (608)224-5084   

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