Oceania Dairy Market Overview

MADISON - Apr 10/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The lack of moisture in Oceania during the downside
of the milk production season continues to impact late season milk
output and the production of manufactured dairy products.  In New
Zealand, the lack of moisture in January and February has greatly
altered second half projections.  Although moisture has fallen since
that time, recovery of lost milk during the drought period has not
occurred.  In many instances, farmers have adjusted their milking
cycles to once a day and for some, they have dried off cows earlier
than usual.  Reports indicate that milk volumes in some areas are down
as much as 40% when compared to previous years at this time.  There is
nothing any of the farmers can do about the current season anymore,
thus they are now focusing their attention towards ending the current
season and conditioning the herd for the upcoming season.  Most
indicate that maintaining the herd as best they can is all they can do
at this time.  Cumulative milk production projections continue to be
adjusted lower, but at this time, milk handlers indicate that output
will probably trail last season by 3 - 4%.  In Australia, conditions
are little changed from what they have been for most of the season.
Milk production figures for the first eight months of the year (July -
February) indicate that late season output continues to narrow the
negative gap recorded earlier in the season.  For the eight month
period, cumulative output still trails last season by 5.8%, but this
negative figure is getting smaller.  Milk handlers project that by
seasons' end, 2007/2008 milk volumes will trail last season by 5%,
substantially improved from the 8 - 9% declines recorded earlier in
the season.  Some recent rainfall in most of the major milk producing
areas of the country has been reported.  This will have minimal
positive impact on the current season, but will enhance moisture
levels for upcoming winter crops and help establish a better base for
the start of the new production season.  Long range weather forecasts
project a reasonable amount of rainfall during the upcoming winter
season.  As the milk production season winds down, so is production of
manufactured dairy products.  In some areas of New Zealand, milk is
moving from one area to another to meet needs.  In most Oceania areas,
production of commodity type products has slowed greatly and value
added output is absorbing late season milk volumes.  Traders and
handlers state that there is basically nothing available to offer on a
spot basis and for most, they are trying to make ends meet for known
needs.  Some traders and handlers state that they may need to reach to
outside sources to fully acknowledge commitments of the current
season.

0930c steve Schneeberger  (608)250-3204

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STAT News Service