European Dairy Market Summary

MADISON - Apr 24/08 - 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 European milk production season continues to
build for most, while holding steady at high levels for some.  Some
milk handlers report that they are noticing some slight declines in
milk volumes.  Most are not attributing the declines to seasonal
declines, but to producers modifying their operations as pay prices
decline.  Earlier in the year, pay prices were higher and producers,
when possible, were resuming seasonal production earlier and enhancing
there herds to take advantage of favorable prices.  Many milk handlers
are commenting on the larger than usual volume of milk that is
available this year versus recent years.  Manufacturing schedules
throughout Europe are running at or very near capacity levels.  Stocks
of manufactured dairy products are starting to increase and are
available for both domestic and international buyer interest.  A
recent tender for various milk products was finalized within the past
week or so.  Details are not fully available at this time, but
scattered reports indicate that Europe and the U.S. will be sources
for skim milk powder for the tender.  Total tonnage is not known, but
the largest portion will potentially be sourced from Europe.  Reports
also indicate that whole milk powder and butterfat will also be
sourced from Europe.  Butter production in Europe is seasonally active
and surplus stocks are being generated.  PSA for butter has been open
since March 1 and through mid April, 51,000 MT of butter have been
offered into the program.  Current year offerings are nearly double
what cleared to the program last year during the same 6 week period.
Butter must remain in the program for at least 6 months, thus the
first possible return to the commercial market would be August.
Current sales activity basically is centering around internal or
domestic needs.  Other than acknowledging the recent tender,
international sales remain slow.  Stocks are building and market tones
are unsettled with whey and skim milk powder markets firm, while whole
milk and butter markets are weak.


EASTERN OVERVIEW: The new milk production season in Eastern Europe is
starting to show more signs of increases.  Temperatures are increasing
and spring weather patterns are more prominent.  Manufacturing
schedules are increasing as milk volumes build.  Some Eastern
manufacturers are indicating that there are some milk powders from
last season available for sale.  Traders and handlers feel that much
of this powder became available after potential sales late last fall
did not materialize.

0930C steve Schneeberger  (608)250-3204

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STAT News Service