Oceania Dairy Market Overview

MADISON - Mar 15/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The milk production season in Oceania continues to trend
lower.  In New Zealand, reports indicate that milk output is trending lower
more rapidly in recent weeks.  Milk producers and handlers indicate that lack
of moisture is the main factor for this trend.  Although milk production is
declining at a faster rate than expected, milk handlers still project overall
milk production to remain ahead of last season by 1 1/2 - 2%. In Australia,
drought conditions continue to impact milk output.  January milk production
figures were recently released which indicated that milk output for the month
was down 10.9% when compared to January 2006.  Monthly milk output was 14.5%
lower in Victoria, 10.1% lower in Queensland, 8.2% lower in Western Australia,
5.2% lower in Tasmania, 4.4% lower in New South Wales, but 5.4% higher in
South Australia.  Cumulative production for the first 7 months (July -
January) was 2.5% lower when compared to the same period a year ago.
Australian milk handlers continue to project that cumulative production for
the year will be down between 9 - 10% on an annual basis.  Lack of moisture is
the major factor in milk production trends this year.  Meteorologists indicate
that El Nino weather patterns have ended thus milk producers and handlers are
now awaiting much needed fall rainfall.  Traders and handlers state that
Oceania stocks remain fully committed to regular and ongoing customer needs
with no additional volumes available for spot buyer interest.  Most traders
indicate that demand continues to outpace supply.  Milk production projections
for the next milk production season still have Australia's output on the down
side and if all factors are favorable, may start to show signs of recovery in
the 2008 - 2009 season.

0930c steve Schneeberger  (608)250-3204

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STAT News Service