Oceania Dairy Market Overview

MADISON - Jun 5/08 - 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 is basically
completed for the 2007 - 2008 year.  In New Zealand, official
production data is still not available, although milk producers and
handlers are projecting that milk output for the season will trail
last year by 4%.  The negative figure is being attributed to the
drought conditions that the North Island experienced in January and
February.  In Australia, lack of moisture again negatively impacted
the milk flow.  Annual production projections are basically unchanged
from recent statements and milk output is anticipated to be down about
5% when compared to last season.  This end of season projection is
greatly improved from early season actual production figures which
indicated that output was down over 9% when compared to the previous
year.  In Australia, a late season uplift in milk output helped the
negative figure become smaller.  Although milk output in both New
Zealand and Australia during the 2007 - 2008 production year was not
positive when compared to the previous season, milk producers and
handlers in both countries are very optimistic about the 2008 - 2009
season.  Farmers have realized near record high pay prices for their
milk during the current season and, in many instances, been able to
payoff or greatly reduce some debt.  New Zealand producers are hopeful
that they will be able to rebound quickly and resume a 2 - 3 %
increase over the previous season.  Many New Zealander's are hopeful
that the upcoming season in New Zealand will realize an even higher
percentage from last season and the 2 - 3% growth will be in
comparison to the 2006 - 2007 year.  In Australia, weather forecasts
are indicating that the upcoming winter season will be colder than
usual.  Many look to this forecast as positive as a colder winter
usually provides additional moisture which is greatly needed.  At this
point, stocks of manufactured dairy products are limited, although
most handlers and traders feel that stocks are sufficient to carry
them into spring and the beginning of the new production season.
Inventories, if any at all, will be very minimal at that time.

0930c steve Schneeberger  (608)250-3204

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STAT News Service