European Dairy Market Summary

MADISON - Oct 23/08 - 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:  Temperatures are starting to trend lower and fall
moisture is prevalent in most European areas.  At this point, pastures
are in decent shape as moisture continues to encourage late season
growth, although producers and handlers indicate that milk volumes are
declining.  Overall milk production is running ahead of last season at
this time, with output during recent months experiencing positive
growth.  Although milk volumes are somewhat heavier than usual for
this time of the season, manufacturing plants are reducing their
production schedules.  In most instances, stocks of manufactured dairy
products are readily available for both domestic and international
buyer interest.  Most traders and handlers state that any sales that
are occurring are for domestic or internal needs with international
buyers still absent from the market place.  Prices for most products
continue to trend lower.  Weaker prices are not just a situation in
Europe, but throughout the international market place.  In the United
States, surplus nonfat dry milk powder is clearing to the Dairy
Support Program (CCC) at $0.80 per pound (around $1765 per MT) with
European prices responding by trending lower.  Bids for the recently
announced dairy product tender have been submitted and now traders and
handlers are waiting for the outcome.  Butter continues to re-enter
the European market place from PSA.  Along with weakening prices,
economic unsettledness continues to also play a role in slow
international dairy product sales.  In most instances, international
currencies are weak against the U.S. dollar.

EASTERN OVERVIEW:  Milk output in Eastern Europe continues to decline
seasonally.  Manufacturers and handlers indicate that new product
production is declining, but they state that they have readily
available volumes of stock for both domestic and international buyer
interest.  At this time, sales that are occurring are for short term
internal needs.

0930C  steve schneeberger  (608)250-3204

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STAT News Service