Oceania Dairy Market Overview

MADISON - Oct 11/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The milk production season continues to develop in
Oceania, with New Zealand seeing the most growth at this time.  New
Zealand's season usually develops sooner than Australia's, although
New Zealand's start is not as positive as forecast, but is running
ahead of last year.  Milk handlers indicate that weather patterns in
both New Zealand and Australia are the major factors limiting stronger
growth.  Although conditions in New Zealand are wet and cool, milk
production is at about 95% of peak projections.  New Zealand's peak
will be around the end of October.  In Australia, lack of rain
continues to plague many dairy regions of the country.  Some early
reports indicate that output during the first three months (July -
September) may be down as much as 18% when compared to last season.
This figure appears to be very dismal, but one must remember that the
2006 - 2007 production season realized a very positive start, thus
current year low volumes skew this percentage quickly.  Stocks of
manufactured dairy products in Oceania are basically limited to
contractual commitments made earlier with minimal, if any, stocks
available for spot or additional buyer interest.  In New Zealand, the
slow start to the season caused some early season shipments to be
delayed, but with milk production near peak levels, shipments are now
generally back on track.  In Australia, limited stock that is clearing
the country is from the 2006 - 2007 production season, with new
product volumes still a few weeks away.  Lack of moisture remains a
major concern for many Australian dairy producers.  Water allocations
are already being reviewed with many producers limited to about 20% of
their allocated volumes.  The big question being juggled by producers
is, when should they use their allocation?  Should they use the
moisture now to establish early pasture growth and hope for future
rainfall, or hope for rainfall now and hold these allocations in
reserve for use later in the season?

0930c steve Schneeberger  (608)250-3204

---

STAT News Service