European Dairy Market Summary

MADISON - Oct 27/05 - 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

Milk production in Europe is trending toward the annual low point.
Demand for butter and cheese is increasing seasonally as is specialty
products for the holiday season.  More milk supplies are heading
toward cheese and holiday products at the expense of powders. Price
pressure is limited for most products, at least for the short term,
aided by the recent Algerian tender.  Overall, international interest
remains quiet.  However, some traders expect weakness could develop
late in the year on butter and powders after the holiday products for
internal EU consumers have been made and more milk returns to products
for export.  Current interest is generally steady at recent levels.
Most of the current price adjustments are due to changes in relative
currency values rather than supply/demand changes.

EASTERN OVERVIEW:  Milk production continues to decline seasonally.
Plant milk intakes still remain above year ago levels.  However, plant
operating schedules are trending lower.  Production is starting to
gear up for holiday products and less for export items.  The recent
Algerian tender reduced some of the supply in inventory.

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STAT News Service