European Dairy Market Summary

MADISON - Nov 21/07 - 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 decline
seasonally, although the decline appears to not be as sharp as in
years past.  Favorable weather patterns and cool temperatures are two
factors that milk handlers are attributing to the gradual decline.
Much of the additional milk is welcomed by many dairy processors.  A
lower that anticipated manufactured dairy product season has
contributed to many manufacturers not participating in international
sales.  Much of the current year's output was directed toward internal
or domestic needs leaving minimal volumes for international sales.
This late season spurt in milk volume is giving some of those
manufacturers a chance to re-establish a workable inventory and
possible get involved with some pre-winter buyer interest.  The
recently announced Algerian tender for various dairy products has very
few details to report.  Traders and handlers have limited information
on the results.  Most feel that the tender will center around both
skim and whole milk powder along with some anhydrous milk fat.  The
next question on most traders' minds is where will the product come
from.  Many feel that a portion will come from the United States, but
also state that a larger portion than previously anticipated might
come from European sources.  Current market conditions are weak for
most manufactured dairy products.  Some late season milk volumes are
providing for some late season manufacturing, thus inventories are
building somewhat.  Traders and handlers state that product is
available for immediate and future needs.



EASTERN OVERVIEW:  Milk production continues to decline seasonally.
Manufacturers and handlers state that a slower decline at the end of
the milk production season has provided some additional milk volumes
which are easily absorbed by area manufacturing facilities that are
willing to take on the offerings.  Most manufacturing facilities are
operating on greatly reduced production schedules with some operations
already shuttered for the season.  Some Eastern European traders and
handlers state that there is product available and are hopeful that
they may be a supply source for the recently announced Algerian milk
product tender.

0930c Steve Schneeberger (608)250-3204

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STAT News Service