Oceania Dairy Market Overview

MADISON - Oct 12/06 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in New Zealand is trending higher
toward the annual peak level expected in a few weeks.  Current intakes
are just slightly above year ago levels.  Dairy markets are firm
throughout the world at this time as spot supplies available for
export from other exporting countries or areas such as the EU are
minimal.  Market prices are steady to firm.  Deliveries are occurring
against contracts made previously.  Exporters are not pushing sales
too hard until they see how spring peak levels develop and what the
weather forecasts look like for summer.  Much of the current
production is headed toward whole and skim milk production at this
time, reflecting stronger international interest.  Dry conditions
persist in Australia and producers are again worried about having
adequate water supplies for irrigating pastures.  Milk intakes
continue to increase toward the annual peak expected in the next few
weeks.  While rain in intervening weeks may change the situation,
expected water allocations are being reduced as much as 50% of the
total allocation in some areas.  August and September were both very
dry months with current temperatures warm seasonally.  This could lead
to additional herd culling or more cattle parking in areas with
adequate water supplies.  Feed and grain prices are also higher.
Demand for milk from plants remains strong as plants have additional
capacity available.

0930c George Koerner 608.250.3205

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STAT News Service