Oceania Dairy Market Overview

MADISON - May 24/07 - 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 is nearing its'
seasonal end in both New Zealand and Australia.  In New Zealand, the end of
May is the official yearend.  At this point, milk handlers project that milk
production during the 2006 - 2007 year (June - May) will be running about 2%
ahead of last season.  The official end to Australia's production year is June
30th.  The most recent production data (through March or nine months) has
cumulative production down 3.9%.  With three months left of the official
production year (April - June), milk handlers project annual volumes to be
down about 8%.  This is better than an earlier projection which was indicating
a 10% decline.  A better than anticipated final few months of production is
what is causing this projection to be adjusted.  In recent days, rainfall has
been reported in many regions of Southeast Australia.  Granted, this moisture
was not significant enough to replenish severely depleted water reserves, but
was sufficient to green pastures and provided much needed moisture for autumn
crops. Many farmers stated that this was the best weather they have had in
months.  Traders and handlers continue to state that international buyer
interest remains strong for limited product availability out of this region.
Most traders are trying to finish off current commitments without reaching too
far into new season production which will resume in 2 - 3 months. Some
Australian manufacturers are telling their traders and handlers that next
season, they will probably not be able to provide the volumes of manufactured
products to them as they have in recent years.  Some traders are already
looking to outside alternative sources to attain supplemental volumes of stock
to meet ongoing customer needs during the upcoming sales year.  Milk producers
and handlers in both New Zealand and Australia remain optimistic about the
upcoming milk production season.  Although Australian producers have had to
deal with adverse conditions in recent years, current moisture and forecasts
for more to come are rekindling positive optimism for the dairy industry in
the country.

0930c steve schneeberger  (608)250-3204

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STAT News Service