European Dairy Market Summary

MADISON - Mar 13/03 - 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:  The international market is fairly quiet, 
partially attributed to potential conflict concern in the Middle East. 
 While some inquiries have been noted from the Middle East, most are 
simply checking availability and price.  The inability to acquire the 
necessary insurance coverage has hampered recent interest from the 
Middle East.  Other reports indicate that some countries in the region 
but outside the potential conflict area, are currently just not 
issuing the necessary letters of credit.  A few exporters speculate 
that the EU may soon adjust export subsidies based on the stronger 
Euro, at least compared to the U.S. dollar.  Milk producers in EU 
countries such as France have been reducing milk shipments to stay 
within their annual quotas and/or to minimize over-quota penalties.  
This has reduced many current production schedules.  However, 
producers in other countries such as Germany and the Netherlands have 
no such quota problems.  Shipments into intervention programs are 
expected to be light into April.  Through March 7, producers offered 
928 tons of skim milk and 2,945 tons of butter into intervention.  
Current milk intakes are otherwise trending higher seasonally.  
Exporters in the region expect to be the major source of new business 
due to the reduced production in Oceania and the filling of most (all 
but butter) DEIP GATT year quotas for the U.S.  Exporters are aware 
that many buyers expect prices to ease lower seasonally into spring.  


EASTERN EUROPE:  Current milk intakes are increasing seasonally but only 
limited quantities of product for export are being produced.  Part of 
the recent Algerian tender results have reportedly been sourced from 
Poland.  Producers in Poland are expecting a good spring season for 
milk production while others producers in other countries are less 
optimistic.

0930c george koerner 608-224-5083

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STAT News Service

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