Oceania Dairy Market Overview

MADISON - Mar 27/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

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OCEANIA OVERVIEW:  Lack of moisture in both Australia and New Zealand
continues to impact milk output on the downside of the 20078 - 2008
milk production season.  In New Zealand, some dairy producers are
stating that conditions are the driest they have ever seen.  Reports
indicate that drought conditions are being reported in over 50% of the
dairy regions of the north island.  Positive production trends during
the first half of the current season were quickly altered as 2008
arrived.  Positive growth projections over the previous season were
quickly altered as dry conditions severely impacted the milk flow.  At
this point, milk producers and handlers are projecting that New
Zealand's annual output will trail last season by 1 - 2% with some
projecting a 3% decline.  In Australia, dry conditions continue to
negatively impact the milk flow, although strong early season negative
production trends are narrowing as the season winds down.  Australian
milk handlers and producers are projecting that by season's end, milk
volumes in Australia will trail last season by 5%.  As producers in
both countries are stating, there really is very little that they can
do at this time to remedy the situation, thus they have to deal with
current conditions.  With this being said, they have no control over
rainfall, but do have control of herd health and conditioning.
Farmers are reducing milkings per day and drying cows off earlier than
usual.  Being optimistic about the upcoming season, they are at least
trying to retain and maintain cow conditioning as best they can.  As
far as market prices and conditions within Oceania are concerned, very
little has changed from what has been the situation for much of the
year.  Fully committed stocks continue to clear Oceania shores with
some handlers and traders closely monitoring stock availability as the
production season winds down.  The dry conditions in New Zealand
significantly impacted end of season stock generations, thus some
handlers feel that outside sources may be needed to fulfill total
commitments.  Prices are generally holding steady with influences from
U.S. and European markets being closely watched.

09360c steve Schneeberger  (608)250-3204

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STAT News Service