European Dairy Market Summary

MADISON - Feb 19/09 - 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:  A second round of subsidy levels were announced on
Thursday, February 19.  The common or list refunds, in Euros per
metric ton and percentage change from the previous subsidy are:  skim
milk powder 190, +12%; whole milk powder 290, +12%; butter 550, +22%;
butter oil 666, +22%; and cheese 198.4, unchanged.  Under the
tendering system, 18,000 metric tons of skim powder were bid with
5,863 metric tons receiving an award at a maximum of 219.8 Euros per
ton; 13,800  tons of butter were bid with 2,884 tons receiving a
maximum of 600 Euros per ton; and AMF bids totaled 1,840 tons with 133
tons receiving an award of a maximum of 730 Euros per ton.  Traders
and handlers continue to indicate that the first round of subsidy
announcements has not had a significant impact on sales up to this
point.  Production of butter and skim milk powder continues, with much
of this output potentially headed to intervention which opens on March
1.  Manufacturers and handlers still anticipate that clearances,
especially butter, will be heavy early on in the open season.  Maximum
levels of butter are 30,000 metric tons with skim powder being 109,000
metric tons.  In years past, when intervention maximum levels were
attained, a tendering system was introduced to accept additional
volumes.  Consideration for this to happen again will be addressed by
the Commission if the situation arises.  Clearances of butter to PSA
are reported to have slowed.  Traders and handlers continue to
indicate that stock from last season is still available.
Manufacturers and handlers are trying to clear these volumes before
the new production season resumes.  International buyer interest
remains slow and unaggressive.  Traders feel that buyers are once
again holding back with their purchases until the most recent round of
export subsidies are factored into price quotations.

EASTERN OVERVIEW:  Winter weather conditions continue to prevail in
most Eastern European countries, thus noticeable seasonal milk
increases are still 6 - 8 weeks away.  Traders and handlers continue
to market stock that remains from last production season.  For those
traders and handlers that are part of the EU 27, recently announced
export subsidies are having little impact on sales activity.  Often,
including export subsidies with price quotations, European supplies
are still not price competitive.

1100C  steve Schneeberger  (608)250-3204

---

STAT News Service