Oceania Dairy Market Overview

MADISON - Dec 6/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Although the peak milk production period in New Zealand is
past, milk producers and handlers report that volumes continue to hold up
quite well.  Milk receipts at milk processing facilities indicate that
November production was fractionally ahead of forecast.  Even with a not so
good lead up to the seasonal peak, cool and wet, milk output is running about
2.5% ahead of last year.  Recent weather patterns have settled into trends
typical for this time of the season which are contributing to positive
production conditions at seasonal high levels.  Some milk handlers feel that a
La Nina weather pattern might be developing for the down side of the
production season.  In Australia, spotty rainfall has been reported over the
past few weeks.  In instances, significant volumes of rain have fallen, but
producers and handlers state that for the most part, the moisture is too late
to establish good agriculture conditions for the current season.  Granted, the
moisture that does occur does temporarily green pastures and lawns, but is
quickly depleted if additional rainfall does not occur which is generally the
situation.  Stocks of manufactured Oceania dairy products are basically
limited to contractual commitments made earlier in the season.  New Zealand
stocks are sufficient to maintain scheduled shipments of contractual
commitments.  While in Australia, milk production is trailing last season by
8.6% on cumulative 4 month basis, thus stocks are limited for export and
basically being directed towards an internal or domestic market.  Australian
traders and handlers state that international sales will occur to regular and
ongoing customers, although their needs will most likely not be fully filled.
Oceania prices are generally steady to lower as other international
prices adjust lower.  Oceania traders and handlers report that
international supplies have been limited for much of the fall and
prices have been firm, although in recent weeks, supplies appear to be
more available and prices are adjusting lower.  Many anticipate
further weakness, but do not anticipate that prices will dip to levels
of last year at this time.

0930c steve Schneeberger  (608)250-3204

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STAT News Service