Oceania Dairy Market Overview

MADISON - Mar 2/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Australia and New Zealand continues
to decline seasonally.  In Australia, hot temperatures in December had
a negative impact on milk production on the down side of the year.
Output for December was 0.4% lower than December 2004 and continued to
cause cumulative production volumes to decline to 0.3% ahead of last
year.  Earlier on in the year, milk handlers and producers were
optimistic that output this year would be around 1% ahead of last
season, but it does not appear that this will be the case.  Output in
Victoria during December was 1% lower than last December, but
continues to run 0.5% ahead of last year on a cumulative basis.
Although official production figures have not yet been released for
January, producers and handlers feel that the heat of December will
continue to impact production trends for January and basically the
balance of the year.  In New Zealand, milk handlers and producers feel
that output is gaining some on last year, but still is trailing early
season projections.  Manufacturing schedules in Oceania continue to
edge lower, although most handlers and traders are comfortable with
supplies at this time.  Some traders and handlers are concerned about
having sufficient stock volumes to fully acknowledge commitments as
milk production dips in some region more rapidly than in others.  Most
traders feel that they will have minimal stocks, if any, available at
the end of the season for spot or additional buyer interest.  Some
traders are already looking to the new production season and starting
preliminary sales negotiations with potential buyers.

0930c steve Schneeberger  (608)250-3204

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STAT News Service