European Dairy Market Summary

MADISON - Mar 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:  The European dairy market is firm and prices are
steady to generally higher on powders.  Milk production was strong in
February and early March and continues to increase seasonally toward
the spring peak.  Some areas are having very mild late winter/early
spring weather but it remains too early for pasturing in central and
northern European countries.  Producers in a few countries are
watching receipts to minimize over-quota levy problems until March 31.
Only three countries are currently expected to exceed their quota this
year.  As part of the program, 11 of the original EU countries will
again increase their quota level by 0.5% next quota year (April 07 -
March 08).  Milk intakes are approaching annual peak levels in
southern European countries such as Italy and Greece.  With supplies
limited elsewhere, international buyers are concentrating on Europe to
source supplies.  However, there is not enough currently available to
fill export interest.  Prices of skim milk are increasing rapidly.
Manufacturers continue to concentrate milk supplies on products for
internal EU use such as cheese though extra milk supplies have been
heading toward butter/powder for internal and export demand.  Internal
cheese demand is having trouble using all the cheese after recent
increases in cheese plant capacity.  The strong whey market is helping
keep cheese milk prices firm.  Bottlers and retailers are still
negotiating milk prices for fluid products with milk producers
expecting higher prices to levels comparable for manufactured
products.  Manufacturers are also preparing specialty products for the
upcoming holiday season.


EASTERN OVERVIEW:  Eastern European milk receipts are increasing
seasonally.  Product supplies from last season are minimal.  New
production is still too light to fill large orders.  Growth continues
in internal consumer products instead of products for the export
market.

0930c george Koerner  (608)250-3205

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STAT News Service