Oceania Dairy Market Overview

MADISON - Aug 16/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The milk production season for 2007 - 2008 is
now underway, at least in New Zealand.  Milk handlers state that
cool/wet conditions are slowing production increases at this time,
thus the start of the season is not as strong as previous years.
Although the season is off to a slow start, milk producers in New
Zealand remain optimistic about the upcoming season.  Early
projections on milk output during the upcoming season are around
3% ahead of last year.  In Australia, the start to the new milk
production season is still 4 - 6 weeks away.  Although year around
milk production is being reported, July and August volumes are
lighter than last year.  Australian milk producers and handlers
are not alarmed by this due to the fact that July and August 2006
were very strong production months.  Most Australian milk
producers remain optimistic about the upcoming milk production
season.  Most realize that they will be in a rebuilding mode for
much of the season and project that production will probably trail
last season.  Winter moisture continues to fall in varying amounts
throughout the major milk producing areas of Australia.  Water
levels continue to build in catchment basins, but reports indicate
that they are still well below last year levels.   With New
Zealand's start not as positive as desired or projected, some
early season shipments are being delayed until milk volumes and
manufactured products increase.  The slow milk production trend is
also putting upward pressure on early season pricing from the
Oceania region.  Traders and handlers do not foresee a significant
strengthening in prices, but acknowledge firmness.  Stocks of
manufactured products remain limited and, for the most part, are
fully committed for the first half of the production season with
second half negotiations still occurring and often not finalized.
Traders and handlers are very cautious to not over commit at this
time.  Most indicate that they will wait until the season develops
further before making final decisions.

0930c steve Schneeberger  (608)250-3204

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STAT News Service