European Dairy Market Summary

MADISON - Mar 3/05 - SNS -- Dairy market conditions in western and eastern Europe were reviewed in the latest report on the sector released by the USDA today.

WESTERN AND EASTERN EUROPE

WESTERN EUROPEAN OVERVIEW:   Milk producers in Europe continue to monitor
their milk marketings as the milk quota yearend nears.  By the end of March,
handlers and traders feel that milk volumes will not be at quota levels for
producers in many of the member states.  During the current quota year, milk
output has been lagging last year and this trend continues during the winter
months.  Milk handlers report that winter weather conditions, measurable snow
and cold temperatures, prevailed during recent weeks, which are stymieing milk
production growth.  Intervention has now opened and some small volumes of
powder have been offered to the program.  Traders and handlers feel that some
volumes will clear to the program, but domestic and international buyer
interest should clear surplus offerings without the maximum intervention
levels being attained.  Traders report that international buyer interest is
gaining momentum.  They also indicate that international supplies are limited
to the point that European stocks will probably be actively sought during the
upcoming months.  Buyers are looking for shipments as early as April and are
reaching well into the summer months.  Many of these buyers have been absent
from the market for quite some time and are now in need of dairy products once
again.  Stocks of product are available for near term shipment with new stocks
available soon as the milk production season gains momentum.  European traders
are looking forward to active sales in the coming months.

EASTERN EUROPEAN OVERVIEW:  Winter weather conditions continue to prevail in
most Eastern European countries.  Overall milk volumes are trailing last year,
although milk producers and handlers remain optimistic about the upcoming
season.  Traders and handlers of Eastern sourced dairy products remain very
positive about upcoming sales potential for Eastern sourced dairy products.
Stocks of product are available for immediate shipment, although most handlers
and traders are looking toward new production to fulfill buyer interest.

0930c steve schneeberger  (608)224-5084

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STAT News Service