European Dairy Market Summary

MADISON - Apr 12/07 - 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:  Milk handlers report that milk receipts since the
first of April are higher than they were at the end of March.
Granted, some of the increases are from seasonal milk production
increases, but handlers indicate that more milk must have been
withheld from the market at the end of the quota year than
anticipated.  Warmer temperatures and favorable moisture are being
reported in many areas of Europe.  Pastures are greening and in areas
where pastures are dry enough, grazing has resumed.  At this point,
many factors are pointed to a very favorable start to the new
production season.  Demand for manufactured dairy products remains
strong for both internal and international buyer interest.  In many
instances, handlers and traders indicate that supplies are basically
fully committed for April/May deliveries with buyers eager to secure a
supply source for future needs.  Often, suppliers are hesitant to
commit as heavily as they had earlier until they have a better
indication as to how the milk production season is developing.  In
years past, intervention stocks were a source of supply when stocks
tightened, but at this time, intervention stocks are zero.  There have
been no offerings of butter or powder during the current open season
which began March 1.  This is the first time since the program began
in 1964 that stocks have been this low.  Limited supply continues to
strengthen prices for most all manufactured dairy products.  Prices
are often establishing record high levels on an ongoing daily basis.
Reluctant buyers continue to question when will the strength end, but
realize that if they do not acquire available supplies at these
levels, they will go without and jeopardize their product formulation
and end product results.  For every product that is available at these
prices and unsold to a potential customer, there is usually another
buyer waiting to take advantage of the offering.


EASTERN OVERVIEW:  Reports of increasing milk production are becoming
more prevalent in Eastern Europe.  Usually this region of Europe
trails Western trends by 4 weeks or so.  A milder winter, thus earlier
spring trends are occurring in this region.  Milk handlers are hopeful
for a good milk production season as they are getting heavy inquiries
for manufactured dairy products.  Some of these inquires are being
acknowledged, but manufacturers and handlers are cautious to not over
extend themselves for deliveries for June and beyond.

0930c steve Schneeberger  (608)250-3204

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STAT News Service