Oceania Dairy Market Overview

MADISON - Jul 19/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in New Zealand and Australia is at
seasonally low winter levels.  Milk handlers indicate that winter weather
patterns are quite typical in both countries.  In New Zealand, cool/wet
conditions prevail throughout much of the country.  These conditions are what
are typically anticipated and should provide a good start to the new milk
production season in the next four to six weeks.  In Australia, much needed
moisture is being reported in many regions of the country.  Although rainfall
is occurring, greatly depleted moisture levels have a long way to go before
reestablishing good levels.  In some areas, more than sufficient rainfall is
occurring and, in instances, causing flooding and soggy pasture conditions.
In these areas, some farmers are moving their grazing herds to higher/dryer
ground.  Some Australian milk handlers and market analysts indicate that six
more weeks of good winter moisture would be ideal.  Traders and handlers
continue to indicate that buyer interest remains strong from both regular and
ongoing customers to new buyers.  In most instances, traders state that they
are currently only acknowledging ongoing customer needs.  Most indicate that
all of first half production is committed with traders and handlers working on
second half needs at this time.  Suppliers and handlers state that there is a
supply gap between offerings and need.  Most feel that this gap will prevail
for much of the season as suppliers have many options to place available
product.  Oceania traders and handlers are very aware of the firm prices that
are being reported out of Europe, but also state that supply shortages often
cause prices to react in this way.  Traders state that Oceania prices are firm
and they anticipate that prices will fluctuate around current levels for the
foreseeable future.

0930c steve Schneeberger  (608)250-3204

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STAT News Service