European Dairy Market Summary

MADISON - Dec 20/07 - 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 remains light seasonally.
Some in the industry remain surprised that milk producers in the EU
have not shown a stronger/faster response to higher milk producer
prices in many countries by boosting output.  The emphasis for
products being produced has shifted from cheese and internal EU
consumer specialties for the holiday season back to industrial/export
products.  Manufacturers producing and/or holding stocks are trying to
minimize yearend inventory levels with some price specials available
to reduce inventory.  New international interest is quieter and
expected to remain light until after the holidays.  Many reported
prices are lower, reflecting the need to have prices be competitive
with other sources in the world and the slightly stronger U.S. dollar
against the Euro.  Also, with most Oceania production sold earlier,
prices are showing more of the resistance that exists from
international buyers.  The EU Commission has proposed increasing
producer dairy quotas by an additional 2 percent in April 2008 to
increase milk supplies and to help limit consumer price increases.


EASTERN OVERVIEW:  Milk production continues to decline or is at low
seasonal levels.  Manufacturing of dairy products in Eastern Europe is
light.  Holiday orders have been filled.  Supplies are available for
near term needs.  Buyer interest is spotty as many buyers take time
off to enjoy the holidays.

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STAT News Service