European Dairy Market Summary

MADISON - Nov 10/05 - 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 near seasonal low levels, however many
milk producers and handlers are surprised at the volume of milk that
is still available for this time of the season.  Some are attributing
the extra milk volumes to milder weather conditions for early
November.  At this point, there have not been many cold temperature
days.  As milk volumes decline seasonally, production of manufactured
dairy products is also winding down, although stocks are available for
domestic and international sales.  Some traders are quite surprised at
the volumes of stocks that are available, but then look at the lack of
international sales during recent months and then realize why.
Domestic sales have been quite regular, but are not significant enough
to clear all supplies.  The U.S. dollar hit a two year high early in
the week with the Euro sinking to $1.1711.  Some analysts feel that
the weak Euro is being pressured by interest rates and worries about
unrest in France.  Ramadan is now past, but international sales remain
slow.  Many traders feel that sales activity will probably remain slow
until after the first of the year when hopefully buyers will need to
return to the market place.  Some small sales activity is occurring,
but nothing significant compared to other years at this time.  Some
European traders were surprised at the small amount of powder that was
sold to Algeria in the recent tender.  They point to firm
international prices and how international buyer interest for many
dairy products seems to be trending lower.  At the November 10th Dairy
Management Committee meeting, most refunds were unchanged, although
whole milk powder was reduced 21 Euros to 500 Euros per metric ton.


EASTERN OVERVIEW:  Milk production continues to edge lower in Eastern
Europe, although milk marketings remain heavier than last year.  Some
manufactured dairy product stocks have been clearing through small
sales although there are still sufficient volumes available for
additional sales.  As has been the case for much of the year, dairy
product prices are slightly lower in Eastern EU regions than in
Western EU counterparts.

0930c steve Schneeberger  (608)224-5084

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STAT News Service