Oceania Dairy Market Overview

MADISON - Feb 19/04 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production in Australia and New Zealand continues to 
seasonally decline.  In Australia, hot temperatures in Northern Victoria are 
taking a toll on pastures.  In recent days, temperatures around 45 Celsius 
(104 Fahrenheit) were recorded in the region.  Although milk production is 
declining, milk producers and handlers are hopeful that farmers have enough 
water to irrigate their properties as the season winds down.  Milk production 
figures have not been released recently, although most producers and handlers 
continue to feel that output is running well behind last year.  With recent 
hot temperatures, many feel that a strong finish to the season will probably 
not occur this year.  In New Zealand, heavy rains have occurred in the major 
dairying areas of the North Island.  This rainfall is having both a positive 
and negative impact on production trends for the country.  Moisture at this 
time of the season is good for sustained pasture growth, although wet 
conditions are often more difficult on the milking herd.  Stocks of 
manufactured dairy products remain in close balance.  In most instances, 
handlers and traders are focusing on meeting their contractual commitments.  
Most handlers still feel that they will not have any or very limited amounts 
of surplus product to offer as the production season winds down.  Prices are 
steady to firm with cheese in the firmest position.  Oceania traders indicate 
that they have been receiving some inquiries from U.S. buyers looking for 
butter.  At this point, Oceania suppliers are not committing to these 
inquiries, but are leaving the door open in the event that stocks are 
available after their commitments are filled.  In the U.S., cash butter prices 
through February 18 now at levels that may trigger imports of non quota 
butter.  U.S. buyers are in the international market looking for additional 
butter supplies as many feel that domestic production will not keep pace with 
demand, thus additional stocks will be needed for later in the year. 

0930c steve schneeberger  (608)224-5084 

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STAT News Service

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