European Dairy Market Summary

MADISON - Apr 14/05 - 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 European milk production season is off to a
positive start.  Early reports indicate that milk receipts are running 2 - 3%
ahead of last year at this time.  Milk handlers and traders state that weather
conditions have not been all that conducive to early season gains.  Pasture
growth remains slow with most producers in Western Europe still holding their
cows off of pastures for possibly another week or so.  Much of the production
growth is being attributed to winter feed carry over which remains plentiful
and of good quality.  Stocks of manufactured dairy products are increasing as
the milk production season develops.  In recent weeks, prices have been
weaker, although in recent days this weakening trend has slowed and in
instances, prices are gaining strength.  Sales activity is being reported, but
no significant new sales are reported at this time as export refunds are
limited through the end of June and uncertain for later deliveries.  Traders
and handlers feel that potential buyers will probably continue to hold off
with their buying decisions until production and market conditions provide a
better picture.  The recent Algerian tender has about 15,000 - 20,000 MT of
European sourced skim milk powder clearing the region in upcoming months.
Traders and handlers report that much of this powder will be sourced from
Eastern European EU-25 countries.  Intervention offerings of skim milk powder
and butter continue, but the volumes are minimal in comparison to other years
at this time.  Producers and handlers of these products feel that total
offerings of skim milk powder during the open season will not attain maximum
levels this year, but butter may be heavy.  Most feel that sales both
internally and internationally will be significant enough to clear surplus
volumes.  Since March 1 and through April 12, 1,570 MT of skim milk powder
have been offered to intervention.  This total compares to 2,456 MT during the
comparable period last year, nearly 6,000 MT in 2003, and 21,000 MT in 2002.
During the first six weeks of the current open season, butter offerings
totaled 14,622 MT versus 14,466 MT last year at this time.

EASTERN EUROPEAN OVERVIEW:  Seasonal milk production trends in Eastern Europe
continue to expand.  Weather conditions are warming up on a daily basis, but
pasture and grass growth is being slow in maturing this year.  For the most
part, milk producers are not pasturing their cows as of yet and indicate that
it may be two - three weeks before pastures will be ready for grazing.  The
recent Algerian tender for skim milk powder has between 15,000 - 20,000 MT of
powder being sourced from Europe.  Traders indicate that a significant portion
of this powder will be coming from Poland with shipment now through June.
Outside of this sales activity, Eastern European traders and handlers state
that sales are slow, but potential buyers are returning to the market.

0930c steve schneeberger  (608)224-5084

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STAT News Service