Oceania Dairy Market Overview

MADISON - Mar 13/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in the Oceania region continues to
edge lower as lack of moisture continues to plague milk output trends
in both Australia and New Zealand.  In Australia, lack of moisture for
most of the current production season has caused milk output to trail
last for the first seven months of the season.  Milk output in January
trailed last January by 1.7% which was the smallest decline year on
year comparable thus far this season.  As the milk production season
winds down, cumulative milk output during the first seven months (July
- January) trailed last season by 6.5%.  Although the percentage
figure appears to be large, the spread between the two years is
getting narrower.  In New Zealand, lack of moisture in the past two
months has accelerated the decline in milk output during the downside
of the season.  Lack of moisture for about six weeks during the past
two months sharply reduced milk volumes, especially on the North
Island.  Although recovery of these losses will probably not occur,
some stability is returning to the milk flow as moisture once again is
being reported in the region.  Milk producers and handlers state that
the lack of moisture really negatively impacted the milk flow, but at
least recent moisture has slowed the decline and now milk production
trends are basically back in line with comparable periods in previous
years.  Milk volumes, on a milk solids basis, are now trailing last
season.  Many milk handlers feel that milk volumes will probably not
be able to recover enough by the end of the season to breakeven.
Stocks of manufactured dairy products are in very close balance to
generally short of full needs.  Producers and handlers feel that they
will probably need to look to outside sources to fully acknowledge
commitments made earlier in the season due to the lack of moisture and
its' impact on milk output.  New sales activity out of Oceania is
limited as nearly 100% of available stock is fully committed.  Traders
and handlers state that prices are adjusting minimally with most
changes occurring due to currency fluctuations.

0930c steve Schneeberger  (608)250-3204

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STAT News Service