European Dairy Market Summary

MADISON - Jan 17/08 - 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:  Now that the holiday period has passed, traders and
handlers continue to report that buying interest remains slow.  In
recent days, prices for manufactured dairy products have stabilized
and, in instances, increases are starting to be reported.  During and
since the year end holiday period, prices for most dairy products
continued to decline, but in recent days a firmness in the market
place is starting to occur.  Price ranges will often indicate lower
prices than two weeks ago, but due to USDA's bi-weekly International
reporting cycle, price ranges are also starting to reflect the turn
around in the market.  In light of this market turn around, some
traders and handlers report that buyers are returning to the market
place.  Stocks of manufactured dairy products are available for
immediate or near term needs.  Most of the current supply was
generated during the past milk production season with some minimal
volumes of new production clearing the marketplace. Manufacturers are
moving very cautiously to not put themselves in the position as they
were last season.  The uncertainty of the upcoming milk production
season has manufacturers monitoring their commitments very closely.
The new milk production season will resume in the near future. Some
milk handlers and manufacturers feel that with a fairly mild winter
thus far, conditions might be conducive to an earlier start to a
positive milk production season.  Recent discussions for a 2% increase
in the milk quota starting April 1 are still not finalized.  A vote
still needs to occur.  A few countries are now pushing back from
support of an increase in light of weaker dairy product prices.  More
enthusiasm for an increase was apparent when milk supplies were short
and product prices were at record high levels.


EASTERN OVERVIEW:  Winter is still at hand in Eastern Europe thus no
significant changes are yet occurring with the new milk production
season.  Manufacturers and handlers state that there is stock
available for buyer interest and lower prices are often occurring to
hopefully clear this inventory before the start of the new season.
Prices in Western Europe are reported to be stabilizing with some
increases noted, although traders and handlers of Eastern European
stocks are not seeing this trend as of yet.  They indicate that if the
market is starting to turn around, they anticipate that buyer interest
might return for Eastern sourced products.


0930c steve Schneeberger  (608)250-3204

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STAT News Service