European Dairy Market Summary

MADISON - Jul 17/08 - 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
wind down.  Milk producers and handlers state that the decline is more
gradual this season.  Many attribute the good volumes of milk this
season to the positive/early start in many regions, especially France.
Temperatures are increasing, thus milk handlers anticipate that the
decline might be more noticeable which would be typical for this time
of the summer.  Butterfat tests are declining, thus the make of
various manufactured dairy products is absorbing additional milk
volume to make up for the butter fat lose.  Traders and handlers
indicate that stocks of most manufactured products are available for
domestic and international buyer interest.  Prices of most products
are unchanged, although whey prices continue to weaken.  Buyer
interest is slow and unaggressive.  Many traders and handlers feel
that buyers are hesitant to procure too heavily at this time and are
watching for further market developments before reacting.  Clearances
of butter to PSA continue, although volumes have eased from earlier in
the season.

EASTERN OVERVIEW:  Milk production in Eastern Europe continues to edge
lower.  Up to this point, temperatures have been mild for summer, but
are now starting to increase.  Milk handlers indicate that increasing
temperatures could quickly alter the flow of milk and thus
manufacturing schedules.  Traders and handlers indicate that stocks of
Eastern produced dairy products are available for internal and export
interest with prices often lower than Western European offerings.

0930C  steve Schneeberger  (608)250-3204

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STAT News Service