European Dairy Market Summary

MADISON - Dec 8/05 - 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:
Milk production is generally just past the lowest point in the annual
cycle.  A winter storm last week covered some areas of Europe
unaccustomed to larger amounts of snow and, when coupled with ice,
caused power outages in the affected areas.  Already producer concerns
about being over-quota for the current year ending March 31 has some
producers culling cows or making adjustments to reduce deliveries in
Germany and France.  Current milk supplies are being directed more
toward consumer products for the year end holidays.  Milk receipts
will likely be shifted back toward export commodities after holiday
orders have been filled.  Cheese demand is seasonally strong with
inventories light in some countries.  The low cheese inventories may
help to keep cheese output heavier longer, at least through the end of
the year.  Buyers trying to source extra loads of some varieties of
cheese, including cheddar for immediate shipment, are finding supplies
limited.  Current international interest in dairy products is light.
Supplemental butter supplies have been taken out of the storage
program to help fill the internal consumer demand.  A current forecast
for 2006 has surplus skim powder supplies to be relatively minimal,
though butter (fat) supplies may not be.  The stronger U.S. dollar
against the Euro and other currencies is affecting reported prices and
helping to make European prices more competitive.


EASTERN OVERVIEW:  Milk receipts are recovering from the annual low
point in the milk production cycle.  Plant milk receipts seem to be
higher in Poland and the Baltic States where a larger share of the
production maybe being marketed rather than kept for home use.
Manufactured dairy product supplies are available.

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STAT News Service