European Dairy Market Summary

MADISON - Feb 15/07 - 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:  Milder than usual weather patterns continue to be
reported over much of Europe during the current winter season.  Many
milk producers and handlers state that they have never seen a winter
season like the current one at hand.  Again, many indicate that it is
still February and a lot can happen before April when weather patterns
usually improve.  With the milder weather patterns, milk handlers
indicate that receipts appear to be increasing in more areas earlier
than usual, although typically this is the time when production starts
to make its' move.  March 1 is nearing and intervention for skim milk
powder and butter will open.  Most manufacturers and handlers feel
that very little butter or powder is being readied for offering early
on in the open season.  They feel that internal and international
demand will quickly absorb production during the upcoming season.
Manufacturers and handlers also state that clearances to PSA will
probably be the direction for surplus butter stocks during the
upcoming season versus intervention.  International buyer interest
continues to gain momentum.  Traders and handlers state that they are
finalizing sales for near term and future deliveries.  Traders
indicate that a North African tender is about to be released.  Most
feel that a significant portion of this tender will be filled from
European sourced product.  Much of new buyer interest will be filled
from upcoming production, thus traders and handlers are hopeful that
the upcoming milk production season will be positive.

EASTERN OVERVIEW:  Milk production in Eastern Europe continues to hold
steady at seasonally low levels.  Although some slight increases are
being reported, most milk handlers will not see noticeable increases
for another 4 weeks or so.  Recent international near term sales are
being filled from this region.  Stocks are available for immediate
shipment, but recent sales are decreasing these offering quite
quickly.  Traders and handlers of Eastern European stocks indicate
that buyer interest is strong for future production.

0930c steve Schneeberger  (608)250-3204

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STAT News Service