Oceania Dairy Market Overview

MADISON - Aug 3/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The new Oceania milk production season is just about to
resume.  In New Zealand, milk producers are preparing for spring calving which
will become heavier as the month of August unfolds.  Some calving is already
occurring, but it is still too early to report a milk flow trend.  Producers
and handlers are optimistic about the upcoming season.  Most are hopeful that
late season production momentum last year will carry over to the new season.
In Australia, milk production is holding steady at seasonal low levels.  The
Australian milk production season resumes about a month later than New
Zealand's, thus most Australian producers are still working in winter mode.
May milk production figures for Australia were recently released which
indicated that output for the country trailed last May by 0.5%.  Production in
Australia has not seen an increase over last year for seven consecutive
months.  On an eleven month cumulative basis, 2005 - 2006 output is trailing
the 2004-2005 year by 0.8%.  Milk handlers report that June output was fairly
good, thus they project that the 2005 - 2006 year will finish just slightly
below (0.4%) last year.  Traders and handlers continue to fill orders from
inventoried stock.  Most indicate that warehouses are nearly cleared, thus
ready to receive new production as the new season resumes.  Sales negotiations
for new production continue, but traders and handlers state that a significant
portion of first half production has been booked.  Traders state that most
negotiations have centered around ongoing and regular customer needs.

0930c steve Schneeberger  (608)250-3204

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STAT News Service