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MAY 8, 2003: Milk production in the Oceania regions is at or very near the bottom of the seasonal cycle. In New Zealand, the annual production cycle appears to be nearer the bottom than in Australia. In New Zealand, for those producers that are still in the production cycle, reports indicate that they will be closing out their season within the next few weeks. Milk continues to flow into manufacturing facilities, although the volumes are basically declining daily. As is typically the pattern at this time of the year, manufacturing plants are directing seasons' end milk production toward products of most need. At this time and where possible, drying of milk powders are the most active. Some late season rainfall is occurring in areas which are giving a boost to pasture growth and a slight extension to the milk production season. At this point, reports continue to project annual milk production to about 2% ahead of last year.

In Australia, the milk production season also continues seek a seasonal end. Lower milk production reports, compared to last season, continue to occur out of Victoria, the main production area of the country. Limited rainfall throughout the production season is the main factor producers and handlers are attributing to the projected 10 - 11% downturn in milk output. Some late season rainfall is being reported in areas, but too late for this year. Producers are hopeful that moisture during the upcoming winter season will be generous to replenish depleted water levels so that they will be able to start the new production season on a positive basis.

International sales activity out of the Oceania region remains slow and unaggressive. As has been the situation over much of the season, most sales were acknowledged early in the milk production year and shipments are occurring from those sales. Producers, handlers, and buyers are closely monitoring the supply situation as previous sales were acknowledged on stronger milk production patterns than actually developed within the Oceania region. At this point, producers and handlers feel that they will have adequate stocks to fill known needs, but will probably have very little, if any, additional volumes for spot buyer interest. Although still months away, many Oceania milk producers and handlers are already optimistically looking forward to the new production season.

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