January 7, 2005

Milk Output Continues Downward Trend in Australia And New Zealand

Milk output continues to be on the down side of the season in both New Zealand and Australia.  No new production reports have been officially released in recent days, although milk handlers and producers are indicating that milk volumes are trailing last year in both countries.  Milk handlers remain hopeful that milk production will not decline too rapidly in the second half of the season and that the last half of the season production will be able to make up some of the first half loss. 

The year-end holidays continue to influence market activity.  For the most part, no new sales activity is being reported and stocks of manufactured dairy products in Oceania remain limited and tight.  Most stock is fully committed to regular and ongoing customer needs.  Traders and exporters in Oceania are commenting on the influence the Tsunami disaster is having on dairy export activity.  At this point, for the short term, there may have been some minimal impact of the food service sectors in the affected countries.  In the long term, the concern is what impact the disaster has on the economics. 

Traders state that there is a strong correlation between the economic well being and demand in most Asian countries. Most remain quite buoyant about the outlook for the Asian region

but the disaster could hit hard.