Oceania Dairy Market Overview

MADISON - Jan 8/09 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  Milk production trends in the Oceania region
continue to gradually edge lower.  Milk output in New Zealand is doing
fairly well for this time of the season.  December output was
basically as projected, although cumulative production might be
lagging projections.  Weather conditions in New Zealand have been
fairly stable with moisture falling in Western regions of both the
North and South Island, while drier on the East Coast.  Temperatures
have been warm, but the hot summer temperatures are still to come.
Milk volumes have been sufficient to maintain strong manufacturing
schedules.  In Australia, preliminary November milk production figures
indicate that output for the month was 1.5% heavier than last
November.  Cumulatively, for the first five months of the year,
Australian output is 1.5% ahead of last year.  Milk producers and
handlers are hopeful that this positive trend will continue for the
balance of the year, although as in New Zealand, hot summer
temperatures are still to come which could quickly impact year end
output.  Some milk processors in Australia are announcing lower payout
prices to their suppliers/producers.  This is a very unusual move for
this time of the season.  This is the first time since the 1980's that
any milk processor had cut prices mid season.  Manufacturing schedules
in both Australia and New Zealand are strong with stocks of
manufactured dairy products readily available.  In instances, some
manufacturers are looking for warehouse space for production that is
not clearing Oceania shores.  Usually, dairy products clear the shores
shortly after production, but this year, reports of more uncommitted
stock are occurring.  International buyer interest is slow and
unaggressive.  Deliveries of contracted volumes continue to clear to
regular and ongoing customers, although these buyers are also being
very cautious with their purchasing patterns in a weak market
situation.  In instances, buyers are working down their inventory and
not carrying the level of supply that they normally would have on
hand.  Traders and handlers are hopeful that buyer interest will
improve in the near future, but also state that economic conditions in
Oceania, along with internationally, will probably limit significant
sales for at least the first half of 2009.

0930c steve Schneeberger  (608)250-3204

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STAT News Service

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