Oceania Dairy Market Overview

MADISON - Apr 13/06 - 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 seasonally.
In New Zealand, production reports are mixed.  Some indicate that output is
running ahead of last year while others indicate that output continues to
trail last season.  All reports agree that output for the current season is
down from projections.  In Australia, the heat of December and January
continues to impact end of season production trends.  On a cumulative basis,
production for the first eight months of the season (July - February) is down
0.1% when compared to a year ago.  Monthly production is down 1.9% from last
year and is the sharpest monthly decline thus far this season.  Victoria, the
leading milk production region of Australia, recorded a 2.6% decline from last
year for the month.  This follows a 2.3% decline in January and a 1.3% decline
in December. Milk producers and handlers state that it does not take too long
before these regional declines sharply impact total milk output for the
country.  As milk volumes decline, so are manufacturing schedules.  Some
Oceania manufacturers and traders are taking advantage of outside sources to
satisfy customer needs and directing declining milk volumes toward products of
better return.  At this point, most traders and handlers remain optimistic
that they will have sufficient stocks, coupled with outside sources, to
fulfill current year commitments.  Sales negotiations continue for next
seasons' production.  For now, no major increases or decreases are being
reported.  Some negotiators state that a few customers are somewhat hesitant
to commit at this time.  Suppliers and traders feel that customers are
probably waiting to see what type of a production season is in store for
Europe and what impact this may have on future pricing.

0930c steve Schneeberger  (608)250-3204

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STAT News Service