Oceania Dairy Market Overview

MADISON - Nov 22/05 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production is past the peak in both New Zealand and
Australia.  In New Zealand, it appears that the seasonal peak occurred earlier
than recent years and the peak was not as high as anticipated.  Some reports
indicate that output is running about 2% behind last season.  Producers and
handlers state that second half production is still questionable, but at this
time, it does not appear that this period will generate enough additional milk
to make up for first half losses.  Producers on the North Island were more
negatively impacted versus producers on the South Island.  Although the season
began quite positively, cold temperatures in late September and October,
coupled with persistent rainfall are some of the negative factors limiting
production growth.  Conditions on the South Island were equally positive to
start the season, although some production areas are now facing limited
moisture for sustained pasture growth.  In Australia, production continues to
build from month to month.  For September, the third month of the production
year, cumulative output is running 0.9% ahead of last season.  Annual
projections continue to run in the 4% range.  Australia has experienced 3
recent years of limited rainfall, but this year, sufficient moisture is
falling in the major dairy producing areas.  Output in Victoria, the major
milk producing region of Australia, was 1.8% ahead of last September and is
running 1.5% ahead of last year on a 3 month cumulative basis.  Milk output in
all other regions is also on the positive side except in South Australia where
milk production is trailing last year by 6.8% on a cumulative basis.  Although
milk output in New Zealand has not attained projected levels, traders and
handlers remain optimistic in that they will have sufficient volumes of
manufactured dairy products for their commitments by possibly reaching out to
their multi sources for supplies if needed.  As has been the case for the past
few years, Oceania traders are not acknowledging any additional spot buyer
interest until they have a better feel as to how their supply/demand balance
will be.

1300c steve Schneeberger  (608)224-5084

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STAT News Service