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USDA review of dairy market conditions in Australia and New Zealand

OCEANIA OVERVIEW: The winter milk production season is at hand and milk output is at seasonal low levels. In recent days, measurable rainfall has occurred in many dairy production areas of Australia and New Zealand which is helping depleted water levels and winter pasture conditions. Milk producers indicate that as long as temperatures remain fairly moderate, pastures will be able to replenish themselves with lighter supplemental feeding required.

In Australia, and especially the Victoria region, the rainfall is greatly appreciated, but milk handlers state that considerable volumes will be needed to replenish low water table levels in that region of the country. Manufacturing facilities in both countries are basically closed with minimal operations. Overall market activity continues to center around shipments of previously placed orders from inventoried stocks. Traders and handlers continue to indicate that stocks will be sufficient to meet customer needs before the new milk production season resumes in a few months. Milk producers and handlers are looking toward the new season with great optimism.

Early production estimates for 2003 - 2004 in New Zealand are about 2% above last season. This is where the 2002 - 2003 season finished in comparison to the previous year. In Australia, producers and handlers are hopeful that they will not experience another year of production declines. Coming off of a 10% decline in comparison to the 2001 - 2002 year, Australian producers and handlers are hopeful that they will be able to at least hold the line and recover some of the previous year loss.

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