Oceania Dairy Market Overview

MADISON - Jan 5/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production continues to edge lower seasonally in
both Australia and New Zealand.  Adverse weather patterns in both
countries might push overall milk volumes lower on a steady basis.
New Zealand producers continue to struggle with wet conditions.  Early
on in the production year, conditions were favorable, but adverse
weather conditions quickly curtailed good growth.  At this point of
the season, now past the peak, unofficial reports indicate that milk
output is trailing last season by about 2%.  In Australia, milk
production is running about 1% ahead of last year on a cumulative
basis.  Producers and handlers remain optimistic that this positive
level will continue, but in recent days extreme temperature levels
have been reported which could slow second half growth.  Manufacturing
schedules in both countries have been keeping pace with milk volumes.
With milk volumes not up to expectation in New Zealand, manufacturing
schedules for various dairy products are not at desired levels,
although traders and handlers are not overly alarmed at this time.  As
is usually the case, much of the season's production is presold before
the milk production season gets fully developed.  In Australia,
cumulative butteroil production for the first four months of the
fiscal year (July - October) is running 40% ahead of last year with
skim milk powder output running nearly 15% ahead.  Buttermilk powder
output is 1.2% above last year levels for the first four months.
Butter production is trailing last year by 7.2% on a cumulative basis
with cheese, whole milk powder, and whey trailing by 10.4%, 21.4%, and
5.9% respectively.  At this point, most traders indicate that they are
hesitant to acknowledge new or additional buyer interest and focusing
production and distribution toward known and ongoing customer needs.

0930c steve Schneeberger  (608)224-5084

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STAT News Service