Oceania Dairy Market Overview

MADISON - Feb 16/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Oceania continues to decline.  In
New Zealand, milk production is trending ahead of last year at this
time, although still trailing last year on a cumulative basis.  Milk
producers and handlers remain optimistic that cumulative production
figures will come in at better than previously projected levels.  In
Australia, recent high temperatures may have caused milk production
declines to accelerate.  Although official December figures have not
yet been released, some milk handlers feel that output during that
month will be much like November, down slightly.  On a cumulative
basis, many Australian producers and handlers feel that recent trends
and the high temperatures in January will have a negative impact on
milk volumes which could reduce the annual output projection, which
was 1% above the 2004 - 2005 fiscal year.  Milk volumes appear to be
sufficient to maintain active manufacturing schedules, although plant
managers do indicate that milk volumes are trending lower.  Stocks of
manufactured dairy products are sufficient to maintain shipping
schedules.  Traders and handlers state that volumes are in balance for
known needs, but remain hesitant to acknowledge surplus volumes for
spot or additional buyer interest.  As has been the case all year,
current stocks are fully committed to regular customer needs.
International buyer interest is slow.  Oceania traders and handlers
state that even if buyer interest was active, they would not be in the
market due to limited uncommitted stocks.  Most feel that they will
have sufficient volumes to fulfill their commitments and may be able
offer some uncommitted stocks closer to the end of the current
production season.

0930c steve Schneeberger  (608)250-3204

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STAT News Service