Oceania Dairy Market Overview

MADISON - Jul 22/10 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Oceania traders and handlers of
manufactured dairy products continue to analyze the impact of
the sharply lower prices recorded at the July 6 gDT event
might have on current and future prices.  In most instances,
prices did ease, but often not to the extent of the 10 - 15%
declines recorded for the various dairy products traded.  Some
traders are indicating that they have heard that some offers
for various products out of the Oceania region are at levels
below the average auction values.  Traders and handlers are
also stating that buyer interest has slowed greatly with many
buyers stepping back from the market until more stability is
realized.  For those buyers that are still in the market, many
are seeking product for short term or immediate needs with
most stating what they will pay versus what suppliers are
quoting.  Traders are stating that it appears that China may
be backing away from the marketplace as their milk production
comes more in line with needs.  Milk production in the Oceania
region is at seasonally low levels, although the beginning of
the new production season is not far off.  Early projections
for milk production in New Zealand are 3 - 14% heavier than
last year with Australians projecting milk growth to be in the
1 - 2% range.  Although the end of the 2009-2010 season in New
Zealand came to an abrupt end, farmers are very optimistic
about the upcoming season.  In Australia, the end of the 2009
- 2010 season was strong with final quarter (April - June)
milk volumes stronger than projected.  Volumes through May
were able to narrow a cumulative deficit from 6% to 4.5% in
comparison to the 2008-2009 season.  With one month left of
the official production season (June), many milk processors
and handlers feel that output will trail last season by about
4%.  Milk volumes were heavier in the final quarter in
Southern regions of the country and were up as much as 6% when
compared to April - June 2009.


0930c  steve Schneeberger  (608)278-4154

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STAT News Service