Oceania Dairy Market Overview

MADISON - Oct 23/08 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  In New Zealand, milk production is trending higher
and several areas are at high levels as the seasonal peak is being
neared within the next two weeks to a month.  Total intakes are
running steady when compared to last year and projections are likely
tempered by general factors such as a cool spring to rainfall.  In
general, plants are running full with milk moving into more balancing
locations.  A full range of products is being produced.  Casein
production is active as those plants help with the milk flow and
future commitments are made.  Australian milk production is steady to
higher.  There are forecasts that call for milk to be as much as 1-2%
higher than the 2007 season, but some are calling that optimistic at
this point.  Latest numbers are 3-4% higher and declining from higher
earlier changes.  The drought conditions persist in North Victoria.
Water supplies are limited for irrigation.  Forecasts are for average
to below average rainfall in coming months.  Winter grain crops are
developing and the volumes are expected to be higher as more areas
were planted, although now being offset by lower yield expectations.
Increased grain harvest will allow for supplemental feeding to dairy
cattle.  Coastal regions are experiencing more normal rains with crops
and pastures in good shape.  World economic conditions are a factor in
most markets and with most products.  Exchange rates are lower in
Oceania and impacting imports and exporting of products.  Dairy
product prices are lower.  Shipping costs are beginning to trend
lower, reflecting declines in fuel.

0930c Butch.Speth@usda.gov 608.250.3202

---

STAT News Service