Oceania Dairy Market Overview

MADISON - Mar 1/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production is trending lower in Oceania.  In
Australia, summer heat is common and rain though occurring is doing
little to rebuild the severely depleted supplies.  The rain is
adequate to improve pastures and is lessening the immediate need for
additional, generally purchased, feedstuffs and/or slow culling.  The
drought has also caused prices for grain and other feed stuffs to
increase though milk producer prices have also been strong.  February
is generally Australia's hottest month temperature wise and 2007 is no
exception.  A wet autumn rainy season is needed to really rebuild
depleted water supplies.  The current forecast continues for milk
production to be around 10 percent below year ago levels for the
entire milk production season.  Sales activity is very limited as
producers are just trying to fill the contracts made previously
first.  Prices are often nominal since spot sale activity is not
occurring.  In New Zealand, dry conditions and summer heat are
occurring.  The lack of rain is limiting pasture re-growth and may
cause additional problems with late season feed supplies.  Some areas
have already gone about three weeks without appreciable rain.  Market
prices are firm though spot activity is limited.  Manufacturers are
just trying to fill current contracts and see how the tail end of the
season turns out before making additional sales.  The forecast for
milk production in New Zealand is still expected to be just over 2
percent higher than last season.  Strong international dairy product
interest, particularly for powders, will not be covered from Oceania
this season.  Any extra milk will be used in the product(s) that
generate the best return.


0930c George Koerner 608.250.3205

---

STAT News Service