European Dairy Market Summary

MADISON - Apr 10/08 - 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:  The milk production season in Europe continues to
expand, although some milk handlers feel that the peak may already be
here.  Heavy milk receipts at many plants are challenging plant
capacity.  Although weather conditions in many parts of Europe have
been cool and wet, milk output has been strong.  Since the first of
the year, many farmers were encouraged by good pay prices to produce
milk even though they might surpass quota levels and incur a super
levy penalty.  Many felt that the additional milk production, prior to
the end of the quota year, would more than offset over quota
penalties.  The 2007 - 2008 milk quota year end arrived on March 31.
It is still early to officially report those countries that surpassed
their quota, but for many, they did not attain quota levels.  Now an
additional 2% quota is in effect for those countries that want to
voluntarily institute the addition.  Most cows are still being housed
indoors, but many farmers and milk handlers feel that pasture
conditions are good enough to let the herds graze once again.
Traders and handlers report that sales activity is increasing,
especially for internal or domestic needs, although international
inquiries are being reported.  An international tender for various
dairy products is being talked about within the European sector.
Traders and handlers are very curious about how much of this tender
may be sourced out of Europe.  Many feel that the results of this
tender may be known within the next few weeks.  At this point,
European traders are actively filling domestic orders, but are
proceeding cautiously to not over commit.  Prices for most
manufactured dairy products are holding steady with fluctuations in
the Euro basically causing prices to adjust.


EASTERN OVERVIEW: The new milk production season in Eastern Europe is
still a few weeks away, but some milk handlers are reporting earlier
than usual increases.  This is basically following trends that
occurred in Western Europe this year.  At this point, there is not a
lot of sales activity being reported from this region, although
suppliers and handlers are stating that buyer interest is developing.
Stocks are limited, but will increase as the new season unfolds.

0930C  steve Schneeberger  (608)250-3204

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STAT News Service