European Dairy Market Summary

MADISON - Apr 13/06 - 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 Europe continues to build, but
slowly.  Milk producers and handlers attribute colder than usual
temperatures for the slow growth.  Pastures are slow in developing,
thus the milking herd is getting most of their ration from carryover
winter feed volumes.  At this point, handling the increasing milk
volumes is not a problem with milk reported to be directed toward
cheese production versus other manufactured dairy products.  As the
milk flow increases, manufacturers state that butter/powder and whole
milk powder production will become heavier.  Skim milk powder prices
remain firm, although traders and handlers feel that this firm trend
will weaken within 4 - 6 weeks when milk volumes become heavier and
powder production increases.  For the period of March 1 - April 7, no
surplus skim milk powder has been offered to intervention.  This
compares to nearly 1,600 MT last year for the comparable period, 2,500
in 2004, 6,000 in 2003, and 21,000 in 2002.  Butter offering remain
strong.  For the six week period of March 1 - April 7, 18,035 MT of
butter has been offered to intervention.  These offerings compare to
14,622 MT last year and 14,466 MT in 2004 for comparable time periods.
 Traders and handlers state that international buyer interest and
sales activity is limited.  Many feel that buyers will remain absent
from the market until prices trend lower, especially when supplies
from other international sources are available and less costly than
current European offerings.  At the Dairy Management committee meeting
on Wednesday, April 12 (due to the upcoming Easter holiday), no major
dairy related issues were addressed.  Common refunds were unchanged
with various export refunds adjusted slightly.


EASTERN OVERVIEW:  Milk production in Eastern Europe is also
developing slowly.  Producers and handlers are attributing the colder
than usual temperatures to the slow production growth.  The new milk
quota year is just beginning and many manufacturing plants are not
experiencing a significant upturn in receipts.  Many feel that most
producers were within their quota limits.  Traders and handlers in the
region indicate that international buyer interest remains light.
Stocks of product are available for immediate or near term shipment,
but firm prices are often limiting buyer interest.

0930c steve Schneeberger  (608)250-3204

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STAT News Service