Oceania Dairy Market Overview

MADISON - Mar 30/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production reports out of Oceania continue to indicate
that milk volumes are declining seasonally.  In New Zealand, milk production
trends are mixed.  Some indicate that output is running ahead of last year,
but below projections while others note that production is trailing last year
by 2 - 2.5%.  In Australia, the high temperatures in December and January did
have a negative impact on cumulative production.  In January, output was down
1.1% when compared to last January.  Production was down in most all regions
for the month except in South Australia and Tasmania.  When compared to
January 2005, output was 2.0% lower in Victoria, down 0.7% in New South Wales,
but 9.7% higher in Tasmania.  The two recent negative production months in
Australia have lowered the cumulative increase to 0.1% for the first seven
months of the current production season. Milk handlers feel that the heat of
recent months will continue to hinder milk output for the balance of the year.
As milk volumes decrease, so are plant operations.  Many remain active while
others are reducing their production schedules by a day or two depending on
milk intakes.  Stocks of manufactured dairy products are reported to be in
balance for needs with some suppliers and handlers reaching to outside sources
to supplement production.  This situation is not unexpected as some suppliers
and handlers had previously made these arrangements early in the production
season, if not before it began.  As milk production winds down, many handlers
and suppliers remain steadfast that they will have very little or no
additional product available at the end of the season for spot or new buyer
interest.  Although the new milk production season is still five months away,
sales negotiations are resuming for that time period.

0930c steve Schneeberger  (608)250-3204

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STAT News Service