Minor Dip in Aussie Milk Output

WASHINGTON - Jun 4/06 - SNS -- Australian fluid milk production is expected to drop 1% in 2005-06 to 10.25 million metric tons (MT) as drier-than-average weather conditions have affected production in the second half of the year.

The latest forecast is well below initial ideas that Australia would produce 10.8 million MT of milk this year, according to a recent report from the U.S. agricultural attache for the country.

Hotter and drier conditions in the beginning of the second half of 2005-06 resulted in production falling slightly under last year's levels. Dry conditions are currently persisting into winter and are forcing some areas back into drought conditions with below average conditions likely affect production into the beginning of 2006-07.

Cheese production and exports for 2005-06 are forecast to decline significantly from the previous year due to: the slight fall in fluid milk production; a reduction in world cheese prices, particularly in the cheddar variety; and a sharp increase in the prices received for butter oil diverting fluid milk away from cheese production.

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