Oceania Dairy Market Overview

MADISON - Jan 3/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Summer weather patterns are being reported in both New
Zealand and Australia during the yearend holiday period.  Very warm
temperatures, especially in Australia (40+ degrees c, 100+ degrees f) are
being reported.  Reports indicate that 2007 was the hottest year on record in
Australia.  In Australia some much needed rainfall has occurred in the past 2
- 3 weeks which enhanced water levels in catchment basins and greened lawns
and pastures.  Although with the hot temperatures and minimal subsequent
rainfall, moisture levels are quickly returning to drought level.  In New
Zealand, temperatures have increased, but not to the levels recorded in
Australia.  Intermittent rainfall has occurred in most regions which is
keeping pastures and grazing areas in pretty good condition.  Milk production
in New Zealand is basically on track with projections.  Milk is running
between 2 - 3% ahead of last season and is holding steady at seasonal high
levels.  The year end holiday period is also causing sales activity out of
Oceania to be reported as slow, although most handlers and traders indicate
that they basically do not have any uncommitted stock available for sales,
thus they do not anticipate much sales activity in the foreseeable future.  As
has been the situation for most of the season, early season commitments
continue to be filled for regular and ongoing customer needs.  Oceania traders
state that even though Oceania supplies are basically fully committed, buyers
are on the threshold waiting for prices to stabilize before they enter the
market place.  Some international supply sources are lowering prices to clear
stock before a new production season resumes.  Once this stock is cleared,
most feel that prices will once again firm, but not to the levels of this past
year.

0930c steve Schneeberger  (608)250-3204

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STAT News Service