Oceania Dairy Market Overview

MADISON - Nov 8/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The milk production season in New Zealand is holding
steady at peak levels.  Some milk handlers state that they have had
two peaks during the current season.  In early October, poor weather
stabilized increasing milk production, thus milk handles felt that
this would be the peak.  By mid to later October, weather patterns
improved and milk began to increase once again, thus surpassing
previous high levels.  Although milk volumes gained momentum in recent
weeks, milk handlers feel that volumes will lag early season
projections of 3% and will settle in around 1 1/2 - 2% ahead of last
season at this time.  In Australia, decent amounts of rainfall have
occurred in recent days, psychologically improving the spirits of
many, but not sufficient enough to replenish greatly reduced water
levels.  Moisture amounts were sufficient to once again green pastures
and lawns in many areas.  Various catchment basins also received
additional volumes which may lead to easing some water restrictions,
especially to urban households.  At this point, many milk handlers
feel that the moisture is too late and insufficient to help the
agriculture community to any great extent.  For some, the moisture
came at an inopportune time as farmers were trying to harvest what
forage they could, thus now loosing quality of that harvest.  Official
Australian milk production figures for the first quarter of the 2007 -
2008 production year (July - September) were recently released which
indicated that cumulative output for the first three months was down
8.2% when compared to the same period last season.  Although current
output continues to lag last season' strong start, the cumulative
negative figure is narrowing.  Australia's peak production period is
still a few weeks away, typically late November/early December.  Milk
handlers are trying to remain optimistic about the current season, but
realistically project cumulative output to trail last year by 5 - 6%.
Product availability out of the Oceania region is very limited.
Basically, manufacturers and handlers are trying to keep up with
commitments.  Some are finding it difficult to catch up on what has
already been delayed this season.  Most feel that stocks will be hand
to mouth for the balance of the calendar year with early 2008 still
unclear.

0930c steve Schneeberger  (608)250-3204

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STAT News Service