Oceania Dairy Market Overview

MADISON - Jun 21/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk output in the Oceania region is at seasonal low level.
The 2006 - 2007 milk production season in New Zealand closed at the end of May
with output running about 3% ahead of the previous year.  In Australia, the
production season will come to an end at the end of June.  For ten months of
the current production season (July - April), cumulative milk output in
Australia trailed last season by 4.3%.  Projections indicate that by the end
of June, Australian output will be 7% lower than the previous year.  Producers
in both New Zealand and Australia are already looking forward to the new
production season with optimism.  In New Zealand, winter weather patterns are
typical for this time of the year.  Rainfall is being reported in the Eastern
Coastal regions which have been the driest.  In Australia, the 2007 - 2008
milk production outlook is extremely variable.  Current analysis suggests milk
production in the order of 9.1 billion liters, slightly lower than the current
year, primarily due to a smaller herd size.  However, winter and spring
rainfall will be critical in determining how next season develops.  Recent
rainfall has been sufficient to reduce, but not remove, some of the rainfall
deficiencies in southeast Australia.  While follow-up rainfalls are clearly
needed, this rainfall has continued to provide short term relief for many
agricultural systems, especially the cropping industry, but also to grazing
livestock.  Traders and handlers continue to fill orders from inventories that
are nearing or are already at the lowest level in recent memory.  For some
suppliers and handlers, they will need to reach into new production once the
2007 - 2008 milk production is underway to fulfill current commitments.
International buyer interest continues to be reported.  Most new or spot
buyers are fully aware of the tight Oceania supply situation, but continue to
inquire about possible product availability.  In most instances, Oceania
suppliers and traders are not acknowledging this inquiry and focusing their
sales programs on regular and ongoing customer needs.

0930c steve Schneeberger  (608)250-3204

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STAT News Service