Oceania Dairy Market Overview

MADISON - Jul 20/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production trends in Oceania are typical for this time
of the winter season.  Production is at seasonal low levels. In New Zealand,
winter moisture levels appear to be higher than recent years.  Rain on the
North Island and snow on the South Island is causing some dairy producers to
feed out hay earlier than usual.  Although this is occurring, most producers
are not overly concerned about running out of feed before pastures are
reestablished for the new production season.  Some feed shuffling among
producers might occur, but for the most part, forage crops should be
sufficient to carry producers through the wet and early growing season.  The
new milk production season will be resuming within the next few weeks.
Producers and handlers are not expressing production projections for the new
season, although most remain optimistic about the 2006 - 2007 year.  In
Australia, good levels of moisture have fallen in recent days which will help
early pasture growth.  The new milk production season is still six to eight
weeks away, but as in New Zealand, Australians are hoping that they will
attain the status quo of the 2005-2006 year and hopefully increase to levels
of previous years.  With this being the off season for milk production, orders
are being filled from inventoried stock.  Traders and handlers continue to
indicate that stocks will be in close balance for needs.  Some Oceania traders
are wondering what impact the recent EU suspension of quota imported New
Zealand butter might have on near term shipments and future sales.  With the
restriction just arising, traders and handlers indicate that it is too early
to speculate on how this will all play out.  Outside of this butter situation,
Oceania supplies appear to be in close balance with needs and most traders
continue to indicate that there will basically be no surplus stocks available
for early season spot buyers.

0930c steve Schneeberger  (608)250-3204

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STAT News Service