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USDA International Dairy Report

OCEANIA OVERVIEW: Milk production trends in the Oceania region continue to decline seasonally. In New Zealand, reports indicated that dry conditions were developing, thus milk production was projected to drop more sharply than desired, causing concern on the part of manufacturers and exporters. In recent days, some much needed moisture has fallen in the major dairy areas, causing plant receipts to increase slightly or at least stabilize, relieving some of the unsettling concerns. With this reprieve in milk production declines, manufacturers and handlers of dairy products are more comfortable with their supply/demand commitments. As the milk production season winds down, some producers that were considering reducing their milking schedules to one time per day or for those that had already adjusted their schedules and now are considering complete dry off, are putting these considerations on hold as milk production recovers slightly.

In Australia, lack of moisture continues to plague most of the main dairy areas of the country, although some moisture has fallen in recent days. Basically all season, milk production reports in Australia indicated that milk output for the year would be down around 10%, although some handlers speculate that this late season moisture will hopefully improve this annual figure. As milk production declines, so are manufacturing schedules in both Australia and New Zealand. For the most part, all plants remain open, but are adjusting processing schedules to accommodate lower milk intakes. Casein output has basically ended which is the first Oceania dairy product to cease production as milk volumes decline.

Stocks of manufactured dairy products are in close balance as contractual commitments are filled. Most manufacturers and traders feel that they will be able to meet these commitments, especially now with the slight up tick in milk production as the season end nears. Most continue to indicate that they will have very little, if any at all, additional stock to offer on a spot basis.

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