European Dairy Market Summary

MADISON - Sep 1/05 - 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 production in Europe continues to decline
gradually.  Milk producers and handlers state that they feel that overall milk
volumes are running about 1% above last year's levels for this time of the
season.  Although milk output is declining, manufacturing facilities in many
areas of Europe remain quite active.  Stocks are reported to be readily
available for both domestic and international buyer interest.  Up to this
point, most sales activity has centered around an internal or domestic market.
International buyer interest has been and continues to be unusually slow.
Traders state that the summer holiday (vacation) season is winding down, which
is typically a slow time anyway, thus they are hopeful that buyers will return
to the market very soon.  Many European traders await September 11 when
supposedly the Algerian tender will be issued.  Traders do not know what the
volumes will be, but anticipate that they will be comparable to previous
years.  They state that Europe has product to meet this potential demand.  The
intervention year is now closed.  At the most recent Dairy Management
Committee meeting on August 25, intervention numbers were released which will
be basically what they will be by August 31.  Skim milk powder offerings
during the open season totaled 16,580 MT, 90% less than last years' 164,554
MT.  During the open season in 2003, offerings totaled 213,633 MT.  Butter
offerings during the open season totaled 142,851 MT versus 212,681 MT last
year and 225,000 MT in 2003.


EASTERN EUROPEAN OVERVIEW:  Milk production continues to seasonally decline.
Milk volumes are reported to be heavier than last year.  Handlers state that
marketings are higher, but overall production is comparable with previous
years.  Eastern European handlers and traders are hopeful that they will be an
active participant with the upcoming Algerian tender which is scheduled to be
issued September 11.  Eastern stocks are available and are often slightly
lower in price than Western European offerings.

0930c steve schneeberger  (608)224-5084

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STAT News Service