European Dairy Market Summary

MADISON - Aug 18/05 - 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:  Mixed weather patterns across Europe continue to
influence milk production trends during the downside of the season.  Recent
weather ranges from continued hot/dry conditions to areas of cooler than
normal temperatures for this time of the year.  For the most part, milk
production within the EU is running about 1% ahead of last year.  Buying
interest is quiet.  Traders and handlers are not overly surprised at the light
trade, but question when will buyers return to the market.  At the present
time, sales activity continues to center around an internal or domestic
market.  Stocks are available for immediate and future deliveries.  Traders
state that although stocks are available, producers and handlers appear to not
be overly concerned about unsold inventories.  Prices remain steady, although
some feel that prices will need to weaken to encourage buyers back to the
marketplace.  The Euro has strengthened considerably against the dollar in
recent days which will further put pressure on sales negotiations.  It is
still holiday (vacation) time throughout much of Europe, but this will soon be
ending, which is typically a time when buyers once again return.  Many
European producers, handlers, and traders continue to closely monitor what is
developing in the Oceania region which may greatly influence future sales
activity and price direction.


EASTERN EUROPEAN OVERVIEW:  Milk production in Eastern Europe continues to
decline seasonally.  Weather patterns are also influencing milk output in this
area.  Reports indicate that dry conditions are occurring in some non EU
countries, thus lower milk volumes.  Traders and handlers feel that some of
these lower production regions might need to reach to other European areas
during the upcoming winter months to fill their dairy needs.  Outside of this
buyer potential, sales for the future remain light.

0930c steve schneeberger  (608)224-5084

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STAT News Service