European Dairy Market Summary

MADISON - Jan 5/06 - 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 in many of the EU-15 countries is
starting to show signs of seasonal increases.  Milk handlers feel that
more producers, than in years past, will need to monitor their milk
marketings as milk volumes increase to stay within quota levels.
Although it is still very early in the new production season,
producers and handlers state that early indicators are pointing to a
strong season.  Winter weather conditions are typical for many regions
of Western Europe, but milder in instances.  Most trading activity
continues to center around an internal market.  European calf milk
feed buyers are actively sourcing standard grade powder for this
purpose.  International trading activity out of Europe is slow and
unaggressive.  Traders and handlers state that prices are too high to
encourage buyers to sources from this region.  A firm U.S. dollar
against the Euro is also limiting buyer interest at this time.  Year
end holiday observances continue to occur in various parts of the
world which traders feel will slow buyer interest until mid January.
Stocks of European sourced dairy products vary.  Supplies appear to be
less available in Western regions versus Eastern Europe.


EASTERN OVERVIEW:  Milk production in Eastern Europe continues to hold
steady at seasonally low levels.  Usually, Eastern European countries
trail milk production trends in Western Europe by about 3 - 4 weeks,
thus minimal reports of increased production are occurring.  Winter
weather conditions are very typical and cold, thus milk handlers and
producers feel that increases are still a ways off.  Stocks of
manufactured dairy products are available for internal and
international buyer interest.  In some instances, sales activity is
being reported out of Eastern Europe, but buyers are from Western
Europe or other EU countries.

0930c steve Schneeberger  (608)224-5084

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STAT News Service