Oceania Dairy Market Overview

MADISON - Jan 18/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The Oceania milk production season continues to decline.
Weather conditions in both countries continue to influence at what pace the
declines are occurring.  In New Zealand, recent weather patterns have been
wet, although mild temperatures prevail.  Milk handlers and traders indicate
that El Nino weather pattern could potentially significantly impact second
half production trends, but for the time being, conditions are fairly stable.
Pasture conditions are in pretty good shape for this time of the season, but
many producers and handlers state that this could quickly change depending on
late summer and fall weather conditions.  Milk production in New Zealand
continues to be projected around flat to 1% heavier than last season.  Again,
weather conditions could influence this direction as the season declines.  In
Australia, conditions are much the same as they have been for much of the
current production season.  Limited moisture in the dairy regions of the
country continues to be reported.  In recent days, hot temperatures and
continued lack of moisture are being reported which puts additional stress on
pasture conditions and the milking herd.  Milk production data for Australia
was recently released for the first five months of the production season (July
- November).  For Australia as a whole, November milk output was down 5.8%
from last November.  Milk output was down 12.6% in Queensland, 8.5% lower in
Victoria and Western Australia, and 1.0% lower in New South Wales.  On a
cumulative basis, total output for the first five months is still on the
positive side by 0.8%.  Most milk handlers feel that December's production
will be comparable to November's, thus cumulative totals will dip below the
previous year.  Most milk handlers are stating that they are taking this
year's production season on a month to month basis.  Early season projections
are being adjusted lower, thus many handlers are no longer projecting on the
season and are trying to remain optimistic.  Stocks of manufactured dairy
products are in close balance with demand.  In many instances, production
schedules are being tailored to commitments and product of most need.  Unless
milk production gains momentum, many Oceania traders state that they do not
foresee this region having any surplus dairy products for spot buyer need.

0930c steve Schneeberger  (608)250-3204

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STAT News Service