European Dairy Market Summary

MADISON - Oct 13/05 - 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 OVERVIEW:  The European milk production season continues to wind down.
 Milk volumes in Germany, France, and Denmark are reported to be running about
1 - 2% below last year.  Much of this decline is being attributed to a very
strong fall season in 2004, thus this year, growth is not as positive and
producers are more closely monitoring their marketings to avoid super levy
penalties down the road.  Producers and handlers feel that the seasonal low
levels of production are still a ways off with this period usually occurring
in late November to mid-December.  Manufacturing schedules are also on the
decline thus, when possible, milk is being directed toward products of most
needs.  At this point, milk continues to clear to cheese output.  Stocks of
manufactured dairy products vary from balanced to readily available.  Prices
are holding steady, although traders and handlers feel that a weak tone is
developing, especially once 2006 arrives.  International sales activity
remains light.  Traders were surprised at the limited volume of skim milk
powder that was awarded under the recent Algerian tender.  The 10,000 MT
volume is half of what they usually purchase.  On Thursday, October 13, the
Dairy Management Committee met.  At the meeting, minimal changes were made
under the tendering system and no common refund changes were announced..


EASTERN OVERVIEW:  Milk production in Eastern Europe continues to decline
although overall milk volumes are heavier than last year at this time.
Producers and handlers still feel that milk production in this region is not
increasing, but rather milk marketings versus home consumption are increasing.
Under the recent Algerian tender, many traders were quite surprised at the
lighter than anticipated volumes of skim milk powder that were awarded.  This
lighter volume and limited international sales, along with potential future
Dairy Management Committee decisions, could put pressure on market conditions,
especially after the first of the year.

0930c steve schneeberger  (608)224-5084

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STAT News Service