European Dairy Market Summary

MADISON - Jun 19/08 - 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:  Milk production in Europe is now starting to
decline with more regularity.  Milk handlers indicate that milk
receipts are fluctuating and are trending lower.  Varying amounts of
moisture, or lack of moisture, are occurring throughout Europe.  Milk
handlers state that lack of moisture will especially accelerate a
decline in milk output if pastures start to dry up.  The recent milk
strike in Germany is over and the total impact of the withdrawal of
milk from the market for the time period is still unclear.  Retailers
and grocery store outlets were probably impacted the most with lack of
fresh milk for customers.  As far as the results of the strike or if
farmers accomplished their objective, those findings are also still
unclear.  Milk marketings are generally back to pre-strike levels, but
some farmers state that they are still not fully satisfied with the
results.  Some indicate that future diversions may be possible.  Milk
volumes are sufficient to maintain projected production schedules of
most manufactured dairy products.  This is the time of year though
that milk volumes are often shifted away from some products and
directed toward products of most need or profitability.  Cream
supplies have tightened for butter production as butterfat tests
decline seasonally and demand for cream from other cream based
products increases.  Sales activity within Europe is typical with
international sales slow.  Some traders feel that international buyers
might be slow to enter the European marketplace as they wait to see
how other international markets develop within the coming month.  For
those buyers that are in the marketplace, sales activity is not
aggressive as both buyers and sellers are proceeding cautiously as to
not over extend themselves.


EASTERN OVERVIEW: Milk production patterns in Eastern Europe are
generally on track with projections.  Temperatures are warm and
moisture is often limited.  Milk handlers feel that both of these
conditions could greatly impact the milk flow and early season
projections could quickly be impacted.  Stocks of manufactured dairy
products are available in most Eastern European countries and in
instances are being priced lower than their Western counterparts.

0930C  steve Schneeberger  (608)250-3204

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STAT News Service