Oceania Dairy Market Overview

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

OCEANIA OVERVIEW:  Oceania's milk production season continues to wind down.
In New Zealand, some recovery on first half losses is being reported, although
overall milk production in the country continues to trail last year.  In
Australia, milk production for the first six months of the season (July -
December) was up 0.3% on a cumulative basis.  This increase is declining from
higher levels in earlier months.  Hot summer temperatures in December and
January could take second half production trends down more rapidly than
producers and handlers desire.  Some indicate that the heat was sustained long
enough that recovery will probably not occur.  Stocks of manufactured dairy
products are sufficient to maintain scheduled shipping schedules, although
some traders and handlers continue to secure product from outside sources to
supplement Oceania production.  Some manufacturers have adjusted their product
mix to better utilize milk volumes for end needs and maximize their returns.
International buying interest remains basically unchanged from recent weeks.
Most of Oceania's trading activity at this time is from sales that were
negotiated prior to the start of the milk production season, thus they
virtually have no additional product uncommitted at this time.  At this point
of the production season, most traders and handlers continue to state that
they will not know if they will have any surplus stocks available for spot
buyer needs at the end of the production year.  Many state that milk
production is vulnerable at this time of the season, thus they are not overly
optimistic that the end of the season will be much different than recent
trends.

0930c steve Schneeberger  (608)250-3204

---

STAT News Service