European Dairy Market Summary

MADISON - Mar 13/08 - 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:  More indications of a positive start up of the milk
production season in Western Europe are being reported.  Early reports
indicate that milk output is running 9% heavier in France and 3%
heavier in The Netherlands, Denmark, and Germany than last year at
this time.  Although winter is still at hand in most regions with
windy conditions and temperatures that continue to fluctuate, milk
handlers remain optimistic about the upcoming production season.  The
European Parliament has announced that member states can choose
whether or not to implement a planned 2% increase in milk quota April
1, the start of the new milk quota year.  This compromise was proposed
by the parliament's agriculture committee in response to concerns
regarding the quota increase.  A decision on the proposal to increase
the milk quotas in the EU will be taken at a meeting of Agricultural
ministers in Brussels on March 17.  European's involved with the dairy
industry have mixed opinions on the implementation of the proposal by
member countries.  Some feel that a 2% increase in milk quota could
jeopardize or not benefit milk producers in various countries, while
others are looking forward to the extra margin.  Stocks of
manufactured dairy products in Europe are quite limited as warehouses
are basically empty from last season and new production is still not
readily available.  Prices are generally holding steady for internal
needs with international prices higher due to a daily record setting
Euro against the U.S. dollar.  Traders and handlers indicate that
international buyers are in the marketplace and looking for second and
third quarter needs.  Traders feel that current prices are probably at
the bottom of a cycle with firmness to occur in the future.

EASTERN OVERVIEW:  The beginning of the new Eastern European milk
production season is still a few weeks away.  Typically this region
lags Western Europe by about 6 weeks.  Reports indicate that shipments
of last year's production continue to clear the region.  At this
point, Eastern European farmers and milk handlers are optimistic about
the upcoming season and are hopeful that their new season gear up will
be as positive as their Western counterparts.

0930C  steve schneeberger (608)250-3204

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STAT News Service