Oceania Dairy Market Overview

MADISON - Feb 1/07 - 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,
although in recent days, steady declines appear to be less noticeable.  In New
Zealand, good weather conditions are being reported in many dairy producing
regions of the country and the decline is following previous trends.  At this
point, adverse El Nino weather patterns are not yet being reported.  Annual
production projections are still in the flat to 1% over last season with some
projecting a 2% increase.  As has been stated before, this could quickly
change if adverse weather patterns develop during the balance of the milk
production season.  In Australia, some recent rainfall has been occurring in
many of the dairy regions of the country.  This rainfall is having a greening
impact on the pastures, but is not significant enough to replenish depleted
moisture levels on the year.  Temperatures have also moderated.  Producers and
handlers are hopeful that moisture and moderate temperatures will continue and
create an autumn that may develop a strong finish for the current milk
production season.  As milk volumes decline, manufacturers and handlers are,
when possible, looking to which manufactured dairy product is in the most need
or will generate the best return.  At this point, this appears to be milk
powders.  Demand remains strong for all dairy products with most supplies
fully committed at this time.  Most handlers and traders state that they do
not foresee much change in the supply situation unless milk production makes a
major positive move during the remaining months of the production season.
Everyone within the Oceania dairy industry is stating that weather patterns
will have a significant impact on milk production and product availability for
the rest of the year and most everyone is trying to remain optimistic about
the balance of the season.

0930c steve Schneeberger  (608)250-3204

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STAT News Service