Oceania Dairy Market Overview

MADISON - Apr 15/04 - 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
decline seasonally, although the declines at this time are slower.  Milk
handlers are optimistic that the late season milk production strength will
help alleviate some of the tight manufactured dairy product supply situation.
Most manufacturers are stating that they do not foresee the strength to be
significant, but at least the additional milk volumes may ease the tightness.
In Australia, a recent report indicated that projected rainfall over the next
three months in the major dairy areas of the country could be below average.
If this does occur in Victoria and Southern areas of New South Wales, milk
handlers indicate that this would not help an already lighter than desired
milk production season and would not help the start-up of the new production
season in August/September.  The current dairy product supply situation in
Oceania is little changed from most of the year.  Prices are basically steady,
although the market tone remains firm.  Limited supplies continue to be
reported, but most traders and handlers feel that they will be able to fulfill
their contracted commitments with little available for spot buyer interest.
Manufacturers are hopeful that milk production strength at the end of the
season will continue with much of this additional milk being directed toward
milk powder production.  Some Oceania traders continue to report spot buyer
interest for butter from U.S. importers with basically all of this buyer
interest going unfilled.  With the current supply situation as it is, many
handlers and traders do not see much spot availability once the new milk
production season resumes in their spring.

0930c steve schneeberger  (608)224-5084

---

STAT News Service