Oceania Dairy Market Overview

MADISON - Jul 31/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The new milk production season is about to resume
in the Oceania region.  Production increases will be apparent in New
Zealand before increases in Australia occur.  Milk producers and
handlers in both countries report that weather conditions, especially
moisture, are the major factors that will determine how the milk
production season develops and expands.  At this point, moisture
levels continue to concern most producers.  Usually, the winter months
provide sufficient volumes of moisture to replenish depleted volumes.
In New Zealand, producers and handlers indicate that they have
received good volumes of moisture during the past month and now they
are hoping for sunshine which would provide for positive pasture
growth.  With the moisture that has fallen in New Zealand, producers
and handlers are hopeful that the drought of last season is behind
them.  Herd conditioning is fairly positive, although some producers
indicate that their herds have been in better shape in previous years
as the new season resumes.  In Australia, water levels are lower than
desired although they are slightly more than last year at this time.
Australians report that August is typically a wet month, thus they are
hopeful that this year will be as expected.  Last year, water
rationing and restrictions were imposed in the Southeastern region of
Australia which is the major dairy producing region of the country.
Many producers and handlers are once again questioning if this
situation will redevelop this year.  Although lack of moisture is a
concern for many, positive milk prices are giving producers an
optimistic outlook on the upcoming season.  If pastures are not as
lush as desired, producers will have some additional monies to
purchase additional supplemental feed stocks.  This is the quiet time
of the milk production cycle.  With the new milk production very soon
to resume, finishing touches of winter maintenance are being performed
at manufacturing plants and most are ready for milk as volumes
increase. Prices are adjusting slightly to clear out end of year
stocks and prepare for the upcoming new season.  Some suppliers and
traders indicate that they are seeing domestic sales slow at the
retail level as consumers look at their disposable income and decide
where they will be spending their income.  Some indicate that retail
dairy sales are lower than projected.  Cheese is a specific item that
is showing signs of slower sales.  Suppliers state that package size
desires are getting smaller, thus overall cheese clearances are
lighter.

0930c steve Schneeberger  (608)250-3204

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STAT News Service