European Dairy Market Summary

MADISON - Oct 12/06 - 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 receipts continue to trend lower toward the
annual low point, generally within a few weeks, depending on country.
The affect of drought on feed quality, reduced volume, and higher
prices may last into next year.  Higher concentrate and grain prices
are hindering the use by some milk producers.  Currently, most dairy
markets are firm in the EU.  Most traders are not expecting much of a
change until orders for internal EU consumer products for the year end
holiday season are filled.  Milk supplies continue to be directed
toward internal EU consumer products, particularly cheese.  Products
for export are in tight supply so little effort is being made to push
exports at this time.  Overall, milk intakes are steady to lower with
consumption higher, reducing the need for exports to balance supply
and demand.  Traders are finding better opportunities to service
customers with product sourced elsewhere in the world though supplies
may also be limited.

EASTERN OVERVIEW:   The affect of the drought on feed supplies and
quality may last well into the new calendar year.  Poland feed
situation was among the hardest hit areas and may reduce volumes of
dairy products for sale both within the EU and for export.   Milk
production is generally trending lower seasonally and supplies
available for export are light on many items.

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STAT News Service