European Dairy Market Summary

MADISON - Jun 22/06 - 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 trends throughout most areas of
Western Europe are on the down side of peak production.  Milk
processors and handlers continue to indicate that total milk volumes
appear to be lower than last year at this time.  Processors and
handlers state that in recent days, warm and in instances hot
temperatures may have taken any potential of production recovery out
of the picture for the time being as output continues to decline.
Milk production declines are typical for this time of the year, but
most milk handlers anticipate a leveling or even a slight increase in
milk volumes sometime during the second half of the season.  When
possible, milk volumes are being directed toward products of most
needs or best return.  This year, cheese production is strong with
other manufactured dairy products absorbing the balance.  Powder
stocks are not excessive, but available for immediate and future
demand.  Butter stocks remain readily available for basically domestic
needs.  International buyer interest for all manufactured dairy
products remains slow.  Now that intervention for butter has been
filled, a tendering system is in place for future offerings.  On June
13, under the first round of bidding, 7,471 MT were received, but the
Commission accepted only 2,908 MT at 2,461.90 Euros per ton.  This
value was 87.2% of the official intervention level.  The next round of
offers are due June 27 with the Commission meeting on June 29.


EASTERN OVERVIEW:  The milk production season in Eastern Europe is
near seasonal peak levels.  Milk handlers report that receipts are
holding steady at high levels, but some also state that fluctuations
lower and higher are occurring.  Eastern manufacturers and handlers
indicate that stocks are building as sales activity remains slow.
Some small lot or immediate shipments orders are being reported, but
much lighter than usual for this time of the season.

0930c steve Schneeberger  (608)250-3204

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STAT News Service