European Dairy Market Summary

MADISON - Jan 18/07 - 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:  Many milk producers and handlers feel that a milder
than usual winter in Europe is an encouraging sign that the new milk
production season might resume at a more positive level than previous
years.  Although temperatures have been milder, some are concerned
about the lower than usual snow level and what impact the lower snow
melt water might have on pasture and crop growth during the upcoming
production season.  Others also state that this is still mid January
and a lot of winter weather conditions could develop in the coming few
months which could change the whole situation.  Overall milk
production remains seasonally low, although most milk handlers are
ready for the increase to occur.  Cows will start to freshen within
the next month, thus the season is just about ready to begin.  With
milk production at seasonally low levels, manufacturing schedules are
equally low, thus sales are being filled from inventoried stock.  Most
sales at this time are for regular and ongoing customer needs.
Traders and handlers report that international buyer interest is
resuming.  Sales of both skim and whole milk powder are being reported
for February - May delivery.  Some of these sales will be filled with
product generated over the Christmas/New Year period, but most will be
filled with new production as the milk production season develops.  At
the most recent Dairy Management Committee meeting last week, the most
significant change came in the lowering of the export subsidy of whole
milk powder by over 50%.  The subsidy was lowered to 100 Euros per
metric ton from 210.


EASTERN OVERVIEW:  Milk production continues to be holding steady at
seasonally low levels.  Producers and handlers state that noticeable
increases are still 6-8 weeks away.  Stocks of manufactured dairy
products are low as sales have been filled from inventoried stocks of
last year.  Traders indicate that international buyer interest is
starting to develop for the upcoming milk production season.  At this
point, minimal stocks are available for immediate shipment, thus
developing orders will need to be filled from fresh production which
will resume in a few months.

0930c steve Schneeberger  (608)250-3204

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STAT News Service