Oceania Dairy Market Overview

MADISON - Sep 28/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Oceania continues to expand.  In
New Zealand, milk output is on the increase, although some milk handlers
indicate that volumes appear to be slightly lower than projections for
this point of the season.  Cool morning and night temperatures are one
factor milk handlers are pointing to for the slow growth in milk
production.  In Australia, dry conditions, especially in Victoria, are
causing concerns for milk producers and handlers.  Some reports indicate
that August 2006 has been the driest in many years.  In Northern areas
of Victoria where irrigation regularly occurs, irrigation allocations
are already being discussed and in instances implemented.  Conditions in
September are not much improved.  Rainfall thus far this month has been
minimal.  In both countries, it is still too early to get a good
projection on milk production trends, although producers and handlers
are hoping to attain levels of at least last season.  Seasonally
increasing milk volumes are generating new manufactured product which is
basically clearing the region without enhancing inventories to any great
extent.  Traders and handlers report that additional buyer interest is
occurring, but minimal surplus stock at this time is limiting sales to
regular and ongoing customer needs.  A large percentage of production
has been committed, thus traders and handlers do not foresee much
participation in spot buyer interest.


0930c  steve Schneeberger  (608)250-3204

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STAT News Service