European Dairy Market Summary

MADISON - Dec 22/05 - 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 at the lowest level of
the season in most EU countries, but is starting to show signs of
increases in Germany and France.  As the milk production season starts
to resume, many milk producers will be closely monitoring their milk
marketings as the quota yearend nears.  Although the quota yearend is
still 3 months away, some producers are already preparing to adjust
their milk shipments to stay within quota limits.  Weather conditions
throughout Europe have been quite typical for late fall and early
winter.  Heavier than usual volumes of snow have fallen in areas, with
some areas, that typically do not get measurable snowfall, reporting
accumulation already this year.  Temperatures are not as cold as they
have been in years past, thus milk producers are stating that
conditions are not adverse for the start of the new production season.
Winter feed stocks are sufficient and appear to be of good quality.
Seasonal, holiday based, manufactured dairy product production has
ceased, thus surplus milk volumes are available for processing.  Most
handlers and buyers state that the majority of this milk will be
clearing to butter/powder operations.  Cheese stocks are low, but many
cheese plants will be out of operation during the upcoming holiday
period.  International buyer interest for most all types of
manufactured dairy products is light.  The upcoming holiday period
along with continued lackluster demand will continue into the new
year.  Traders and handlers have mixed opinions as to how demand will
be in the new year.  Some indicate that they are addressing business
on a day to day basis, while others are more optimistic and state that
the first quarter of 2006 will be a period of increased demand.


EASTERN OVERVIEW:  Milk production in Eastern Europe is basically
holding steady at seasonal low levels.  This region of Europe is
usually a month or so behind their Western counterparts.  Stocks of
manufactured dairy products are reported to be available from this
region, but total volumes are uncertain.  Traders and handlers in this
part of Europe also report that international sales are slow, but are
positive about the new year.

0930c steve Schneeberger  (608)224-5084

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STAT News Service