Oceania Dairy Market Overview

MADISON - Apr 26/07 - 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 wind
down.  In New Zealand, milk handlers indicate that plant receipts are
declining on a steady pace.  Weather conditions in New Zealand are reported to
be good for this time of the season.  Typical rainfall amounts are being
reported for early autumn.  Milk producers and handlers are hopeful that
rainfall continues so as to establish good moisture levels for the winter
season and then for the start of the new milk production season in August.
Milk handlers continue to project that production on the two islands will be
about 2% heavier than last year at the end of the current production season.
Much of the current production strength is coming from the South Island.  In
Australia, lack of moisture continues to impact the agricultural industry,
including dairying.  Last week, the Prime Minister and other Ministers from
the Federal Government spoke on water availability in the Murray-Darling
Basin.  About one-third of Australia's dairy farms are situated within the
Basin.  Comments basically pointed to the fact that if significant rainfall
does not occur within the next 3 - 4 months, irrigation water during the next
production season will be very minimal, if any at all.  At this point,
measurable rainfall has been minimal.  Some moisture fell during the past
weekend, but was quite wide spread and helped very little to replenish greatly
reduced moisture levels.  International buyer interest continues to be
reported, although Australian manufacturers and suppliers virtually have no
uncommitted stock available for this buyer interest.  In most instances,
stocks have been committed early on in the current production season and many
manufacturers are having difficulty meeting these commitments.  It is becoming
more of a factor that Oceania manufacturers are looking to next season's
production to fulfill this year commitments.  Regular and ongoing customers
are also looking at next season's production and trying to negotiate a supply
commitment from their regular sources.  Some of these negotiations are
occurring, although caution is being exercised by manufacturers and traders.
Most Oceania traders feel that firm prices and questionable supplies will be a
factor for the next six to twelve months.  As has been mentioned before,
weather conditions and moisture levels are the major factors traders and
manufacturers are pointing to in their cautious but optimistic outlook.

0930c steve Schneeberger  (608)250-3204

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STAT News Service