European Dairy Market Summary

MADISON - Jan 31/08 - 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:  Winter weather conditions in Europe have been quite
mild when compared to previous years.  Milk producers and handlers
indicate that these conditions are possibly contributing to a positive
start to the upcoming milk production season.  They indicate that milk
volumes are increasing for January, especially in France (+4%) with
the Britanny area of that country realizing a 10% increase in milk
volume over last year at this time.  Most manufacturers and handlers
are optimistic about the upcoming production season.  Currently,
stocks of manufactured dairy products are available for current and
near term buyer interest.  Buyer interest has increased substantially
since the first of the year.  Much of the interest is for domestic
need, although international buyer interest is being reported for
whole milk powder.  In most instances, traders and handlers are
usually able to fill buyer interest with minimal problems, but as more
buyers return to the marketplace, offers of supply are tightening.  A
significant portion of current sales activity is being filled from
last season's production with new product still limited.  Ice cream
and candy producers are once again increasing manufacturing schedules
following the year end holidays.  As the milk production season
develops, manufacturing schedules will increase.  As of February 1,
butter can be generated for PSA clearance March 1.  Traders and
handlers also state that prices for most manufactured dairy products
are on the increase.  A few weeks ago, this trend was starting to
develop and during the past two weeks, significant increases have
occurred.


EASTERN OVERVIEW:  Milk production trends in Eastern Europe are not as
positive as they are in Western regions.  This is very typical for the
region which is usually 4 - 6 weeks behind their Western counterparts.
Winter weather conditions continue to prevail.  Manufacturers and
handlers are optimistic about the upcoming season.  Currently, they
report that they have product available for immediate and near term
needs.  Many are hopeful that resumed buyer interest will reach into
their region so that they can clear their warehouses before new
product is generated.

0930c steve Schneeberger  (608)250-3204

---

STAT News Service