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USDA Dairy Market Overview Jul 3/03 - OCEANIA

OCEANIA OVERVIEW: The 2002-03 milk production season has now ended and milk producers in Oceania are looking toward the new season which will resume in 6 - 8 weeks. New Zealand milk producers and handlers are looking forward to another year of positive growth. In recent days, moisture has fallen in many milk producing areas of New Zealand which is helping with winter pasture conditions, but also replenishing low water levels.

Australia's milk production cycle is also at low levels with milk producers and handlers optimistic about the upcoming season. Just coming off of a season with milk output down 10% from the previous year, producers and handlers are projecting stable production for the new year and are hopeful for gains of possibly 1 - 2%. Rainfall has also been reported in many dairy areas of Australia, but additional volumes are needed to re-establish water tables. New buyer interest out of Oceania is slow as current trading activity continues to center around shipments of previously placed orders.

This is the quiet time of the year for Oceania sales activity, although handlers and traders are indicating that sales negotiations for the upcoming milk production season are active. Traders and handlers continue to indicate that stocks should be sufficient to meet contractual commitments as inventory levels decline. Many are comfortable with their supply situation and indicate that they will be able to make it through the balance of the winter months with minimal volumes, if any, left once the new season begins. Although the new milk production season is just 6 - 8 weeks away, many handlers are still not indicating if they may have any inventories of dairy products available for spot buyer interest.

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