Oceania Dairy Market Overview

MADISON - Jun 22/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Oceania is nearing seasonal low levels.
In New Zealand, the new milk production year has begun, but milk production
increases will typically not resume for another 6 - 8 weeks.  Milk production
figures for the 2005 - 2006 year, which concluded at the end of May, continue
to point to a 4% increase over last season.  Producers and handlers are quite
pleased with this figure and are hopeful that the gains of the past season
will continue into the 2006 - 2007 year.  In Australia, the milk production
year is nearly completed, one more week until the official June 30 end.
Official milk production figures trail by about two months.  For April,
production was down 3.0% when compared to last April.  This brings milk output
for the first ten months (July - April) to 8.8 billion liters, down 0.8% on a
cumulative basis. The last half of the season has not been overly positive,
thus milk producers and handlers remain hopeful that cumulative annual
production will not dip much below a 1% decline from last year.  Manufacturing
schedules are very minimal in Oceania and basically limited to Australian milk
output.  Manufacturing plants continue to reduce schedules and close down for
the season.  Trader and handlers state that stocks are pretty well balanced
with needs during the upcoming winter months.  Some traders state that they
may need to reach to outside, prearranged sources to round out some spot
shortages.  For the most part, virtually no supplies of Oceania manufactured
dairy products will be available for spot buyer interest during the next few
months. Many traders state that they are quite pleased with their
supply/demand balance for this time of the season.  Some have stated that they
had been reaching to outside supply sources at various times during the year
which helped maintain a manageable domestic inventory for this time.

0930c steve Schneeberger  (608)250-3204

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STAT News Service