European Dairy Market Summary

MADISON - Mar 31/05 - 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:   The end of the milk production quota year has
arrived and early reports indicate that previous projections are correct.  For
many countries, milk volumes trailed last year, others are at quota,  while a
few countries are above previous year levels.  Contacts and milk handlers
attribute overall lower volumes of milk to a colder/longer winter which has
slowed seasonal increases. Although the new season is somewhat delayed in
comparison to previous years, milk production is gaining momentum.  Milk
handlers and producers anticipate milk volumes to increase at a steady pace as
favorable early spring weather conditions are being reported.  The Euro
against the U.S. dollars continues to cause unsettledness among most European
traders and buyers.  Buyers are returning to the market, although sales are
limited as buyers remain cautious.  Stocks of product are available for
immediate and near term shipment with new production entering the market
place.  A recent Algerian tender has much of their need being filled from
European sources.  This product will be delivered during the next few months.
The Algerians purchased between 15,000 - 20,000 MT of skim milk powder and
smaller volumes of butterfat, cheese, and whole milk powder.  Intervention
continues to receive surplus dairy products, but at a slower pace than last
year at this time.  Through March 24, skim milk powder offerings total 1,240
MT versus around 1,600 MT last year.  Butter offerings total 6,201 MT versus
over 10,000 MT last year at this time.   Traders and handlers continue to
indicate that intervention offerings will remain low for skim milk powder, but
will be heavy for butter.

EASTERN EUROPEAN OVERVIEW:  Milk production trends in Eastern Europe are
increasing.  Traders and handlers of manufactured dairy products indicate that
there are stocks of product available for shipment, although these volumes are
not significant at this time.  As the new milk production season develops,
additional stocks will be generated soon, becoming available to domestic and
international buyers.  Buyers are returning to the market but finalized sales
remain limited.  European traders anticipate an active sales period during the
upcoming months as international supplies of dairy products are quite limited.


0930c steve schneeberger  (608)224-5084

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STAT News Service