European Dairy Market Summary

MADISON - Nov 8/07 - 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:  European milk production continues to edge lower,
although recently, it appears that the decline has slowed and
basically has plateaued.  Many milk producers and handlers feel that
the flattening is due to favorable milk prices which are causing milk
producers to generate as much milk as possible.  Milk fat tests on the
incoming milk are higher which is also contributing to additional
butterfat to a tight European situation.  With the additional volumes
of available milk on the down side of the season, manufacturing plants
are generating heavier volumes of finished product than typically is
the case.  In many instances, this additional product is welcomed and
depleted stock levels for much of the season are once again being re-
established.  International buying interest has been quite limited out
of Europe during the current season due to lack of supply and firm
prices.  As stocks start to rebuild, prices are weakening.  Results of
the recent Algerian tender for various dairy products are unclear.
Traders and handlers state that basically anyone you talk with has a
different result.  Many traders were questioning where would the
majority of the volume come from.  Many thought that European
participation might be limited due to the short supply of available
product, but with the recent late fall milk volume situation and
heavier manufacturing, European participation might be readily
noticeable.  Traders and handlers state that a clearer picture should
develop within the next few weeks.  The winter feed situation appears
to be in pretty good shape as fall harvests are completed.  The late
season strength in milk production is causing some farmers to reach
into these feed stocks earlier than anticipated.



EASTERN OVERVIEW:  Milk production continues to trend lower
seasonally, although some manufacturers and handlers are reporting a
slowing or leveling of output on the downside of the season.  This
seasonal slow down of production decline is often looked upon
favorably.  Lighter than desired stock levels for much of the season
and now heavier late season output, might provide for some stock for
international sales in the near term.

0930c Steve Schneeberger (608)250-3204

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STAT News Service