Oceania Dairy Market Overview

MADISON - Feb 15/07 - 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 decline.  In New
Zealand, good weather patterns for this time of the season are being reported.
Milk producers and handlers state that grass growth is good, thus sustained
milk production, or at least not noticeable declines, are occurring.  In
Australia, conditions have changed very little and milk production continues
to trail last season.  December milk production figures were recently released
which indicated that milk output for the month was 10.0% lower than last
December.  Cumulative production has now dipped below last year levels by
1.2%.  During the month of December, milk output in Victoria was down 13.5%
but steady in New South Wales, the second major milk producing region of
Australia.  In recent weeks, rainfall has been reported in many part of
southeast portion of the country, but not significant enough volumes to
replenish very low water levels.  Producers and handlers state that current
moisture is greening pastures and will help curb supplemental feed needs.
Milk handlers and producers feel that it will take a number of years for
Australia to re-establish a solid dairy base even if it begins during the 2007
- 2008 production season.  As has been the case for the production season thus
far in both New Zealand and Australia, stocks of manufactured dairy products
are fully committed to regular and ongoing customer needs.  At this stage of
the season, manufacturers and handlers do not foresee much change in these
conditions.  Traders and handlers indicate that international buyer interest
is strong with basically no stock available for any potential buyers. Most
feel that Oceania will be out of the international picture for the balance of
the season.

0930c steve Schneeberger  (608)250-3204

---

STAT News Service