European Dairy Market Summary

MADISON - Feb 27/03 - 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

OVERVIEW:  WESTERN EUROPE:  Milk production trends in most European 
countries are seasonally increasing.  As the beginning of the spring 
flush builds, producers in various countries monitor their output as 
the milk production quota yearend nears.  In many countries, milk 
volumes are reported to be in line with quota volumes, but some 
adjustments may be needed during the final few weeks of March in some 
countries.  During February, production of skim milk powder for 
intervention offering March 1 could be generated.  Traders and 
handlers indicate that some powder is being readied for offering, but 
the extent of these offerings is unknown.  Within the past few weeks, 
the EU Management Committee met and increased the skim milk powder 
export refund from 440 per ton to 510, a 16% increase.  Traders and 
handlers attribute this adjustment to various factors:  a firm euro 
against the dollar, slow international sales, and available stocks 
that are not moving before the start of a new production season.  
European traders acknowledged the final DEIP allocations in the U.S. 
but then state that they will be very interested who the buyers will 
be and what the bonuses will be at this slow sales time.  European 
traders did indicate that an Algerian tender for 12,500 mt of both 
skim and whole milk powder, along with 3000 mt of butter oil for 
March/April delivery is currently being considered.  Outside of this 
buyer, traders report small lot volumes, but nothing significant.  
Political unrest in the world along with the ramifications of 
potential war are causing potential buyers to be cautious.   

EASTERN EUROPE:  As the winter season continues to blanket most of 
Eastern Europe, milk production is not showing significant signs of 
increases.  For the most part, stocks of manufactured dairy products 
are low, but some, small volume sales, are being reported.  At this 
point, Eastern European milk producers are optimistic about the 
upcoming production season and are hopeful that they will be able to 
replenish depleted stocks and once again become more active in 
international sales activity.  

0930c steve Schneeberger  (608)224-5084

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STAT News Service

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