European Dairy Market Summary

MADISON - May 25/06 - 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 continues to build in many regions
of Western Europe, but milk handlers feel that the peak level may
already be at hand.  Although the season had a slow start, recent
gains were significant, but overall milk volumes remain below last
year at this time.  Manufacturing schedules continue to reflect the
increasing milk flow, but also are lower when compared to other years
at this time.  Cheese production continues to receive a significant
portion of available milk with skim and whole milk powder production
lower.  Manufacturers are not overly concerned about lighter volumes
of powder to clear, but traders are voicing their concerns.  Most
sales activity continues to center around an internal market with
international sales slow.  The Dairy Management Committee met on
Wednesday due to the Thursday holiday.  Common refunds for skim milk
powder were reduced slightly to 30 Euros per metric ton (MT).  Tender
refunds remain unchanged, 70 euros for skim milk powder, 1090 for
butter, and 1300 for butteroil.  As of May 19, butter intervention
offerings total 45,968 MT.  This is getting very close to the maximum
level of 50,000 MT.  Due to this, accounting of the offerings will be
on a daily basis until maximum levels are attained.  Traders and
handlers feel that maximum levels will be attained very soon and
surely by the end of the month.  Also, for the first time this open
season, 1,130 MT of Irish skim milk powder has been offered.


EASTERN OVERVIEW:  Cooler temperatures are once again being reported
in Eastern Europe, although good pasture growth and steady production
gains are occurring.  Seasonal peak levels in Eastern Europe are about
a month behind Western producers.  Early reports indicate that some
producers in this region are also realizing lower milk volumes than
usual for this time of the year.  Stocks of manufactured dairy
products continue to build as sales activity, especially international
sales, are slow.

0930c steve Schneeberger  (608)250-3204

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STAT News Service