Oceania Dairy Market Overview

MADISON - Feb 5/04 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production trends in Oceania continue to decline 
seasonally.  Lack of rainfall in many of the milk producing regions of Oceania 
is a common occurrence.  Rainfall has occurred in New Zealand, but has not 
been in the major milk producing regions of the country.  In Australia, 
temperatures were cooler than usual for January and moisture in the major milk 
producing region was also limited.  Pasture growth is also being negatively 
impacted by the lack of moisture.  Milk production projections in New Zealand 
continue to run in the 2 - 3% ahead of last year range, while in Australia, 
output is lagging last season by 6 -7%.  Some manufacturers in Oceania are now 
directing milk, when possible, to products of most need.  At this time, milk 
is being cleared to cheese output when possible.  Prices for Oceania dairy 
products are firm.  Stocks are tight, although most handlers indicate that 
they will be able to meet contractual commitments.  At this point, most 
handlers and traders state that they are not oversold, but will probably not 
have any surplus volumes for spot sales activity.  Traders do indicate that 
there is buyer interest, but due to tight supplies, most Oceania traders are 
not able to acknowledge any of this potential interest at this time.  Traders 
and handlers also state that with tight supplies in Oceania and virtually 
nothing available for spot needs, sourcing supplies in the international 
market for upcoming needs could be very interesting.

0930c steve schneeberger  (608)224-5084 

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STAT News Service

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