Oceania Dairy Market Overview

MADISON - Jul 6/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Oceania is at seasonal low levels.  In
New Zealand, the new milk production season will resume in 6 weeks or so,
while output in Australia will start a few weeks later.  Official Oceania milk
production figures for the 2005 - 2006 production season are still pending.
Producers and handlers feel that a 3 - 4% increase over last year will be
recorded in New Zealand with output in Australia running between flat and 1%
lower.  Winter weather conditions are mixed.  In New Zealand, cold and wet
conditions are being reported while dry conditions are occurring in Australia.
Australian milk producers and handlers state that moisture was not that
prevalent during the last half of the season just completed, June 30.  Milk
producers state that low moisture levels will hinder a positive start for the
new season.  Traders and handlers indicate that inventories of manufactured
dairy production are in close balance with demand.  In instances, some
suppliers are reaching to prearranged outside sources to fulfill their
commitments.  At this point, stocks are in close enough balance with demand
that most traders and handlers are not acknowledging reported spot buyer
interest.  Negotiations continue to occur for the new milk production season.
 Traders state that a significant portion of early season production has been
committed.  Some traders remain hesitant to overextend themselves at this
time, but assure customers that they will work closely with them to provide
needed volumes as the season develops.

0930c steve Schneeberger  (608)250-3204

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STAT News Service