Oceania Dairy Market Overview

MADISON - Feb 28/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production continues to decline at least
seasonally in both Australia and New Zealand.  In Australia, milk
receipts are closer to year ago levels as the sharpest declines last
season occurred after the production peak.  Current weather is
relatively cool for late summer with heavy rains occurring mainly in
the crop producing areas of the country rather than in Victoria or
other major dairy areas.  However, besides the refilling of many
drought reduced reservoirs, lakes, and streams, the prospect of better
crops for feed and export is occurring.  Manufacturers continue to try
to avoid making skim milk powder, the product weakest in price and the
most available elsewhere for the world market.  However, good seasonal
demand remains for cream in Australia for ice cream and other consumer
goods.  Australia continues to import supplemental volumes of cheese,
whey, lactose, and skim powder from other sources including the U.S.
In New Zealand, drought areas have received some rain, but conditions
remain particularly dry in Waikato and other key dairy areas on the
North Island.  Even after recent rains, pasture quality is less than
ideal for grazing.  Much more rain is needed and March forecasts of
larger volumes will not improve the current milk situation.  New
Zealand forecasts have been revised lower with milk production for the
current season now expected to be below the total for last season.
Milk receipts continue to decline.  Lower than expected milk receipts
have caused producers and exporters to stop making new sales to
concentrate current receipts for making products to fill orders made
previously.  Having almost nothing to sell, limits price movement so
most prices are nominal, and any adjustments mainly reflect currency
exchange changes more so than any actual sales activity.

0930C George Koerner 608-250-3205

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STAT News Service