European Dairy Market Summary

MADISON - Jul 6/06 - 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 is trending lower seasonally.
Overall milk production in Europe is down approximately 900,000 to 1 million
metric tons during the first 6 months of 2006 compared to a year ago.  Eastern
Europe is also trending lower as their annual peak occurs generally a month or
so later than Western Europe.  Emphasis on current milk products produced
continues toward cheese as well as "liquid" products over butter and powders.
 Inventories are generally at least adequate for the still fairly light
international demand.  Butter intervention remains active with offerings for
the two week period ending June 29 totaling 4451 tons.  Of this total, 1807
tons were accepted under the tendering system.  The accepted price on the
intervention stocks is 84.3% of the old intervention value and 91.7% of the
new value, as of July 1.  The new intervention value is 2595 euros.  A
cumulative total of 89,510 tons of butter have been placed in PSA storage
compared to 117,256 tons a year ago.  The next scheduled EU commission meeting
is July 13.  There has been no skim offered to intervention and stocks are
empty.

EASTERN OVERVIEW:  Milk production has peaked in Eastern Europe and is
now on the decline.  Stocks continue to build though at a slower rate
than just a month ago.  Current buying interest generally remains
light.  Most deals being consummated are for smaller volumes.


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STAT News Service