European Dairy Market Summary

MADISON - Dec 7/06 - 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:  Current milk production is around annual low levels
through most of Europe.  Manufacturers are currently targeting milk
supplies toward cheese and internal EU consumer products for the
yearend holiday season.  Current production and supplies of commodity
products for export are minimal.  Exporters looking for supplies are
hard pressed to find them in Europe.  Some powder prices are near or
at record high levels, assuming product available for actual sales of
any substantial quantity.  Current quoted prices have caused "sticker
shock" for many international customers.  Of longer term concern, are
the reports of international customers considering reducing production
levels and/or reformulating consumer and livestock feed products to
reduce or eliminate dairy products that are in the tightest supply or
with the largest prices increases.  Many European exporters are likely
to be basically out of the international market until spring when milk
production rebounds or are looking to source supplies from other areas
of the world.  Reported prices are firm overall with the weak dollar
compared to the strong Euro impacting reported ranges.


EASTERN OVERVIEW:   Milk receipts are low seasonally.  Current intakes
are geared toward making internal holiday consumer products.
Manufacturer stocks are about in balance with internal needs.

0930c George Koerner 608.250.3205

---

STAT News Service