European Dairy Market Summary

MADISON - Mar 18/10 - 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:  Late winter weather patterns continue to
plague much of Europe as spring weather conditions are slow to
develop.  Milk producers and handlers state that these weather
patterns are very unusual for this time of the season.
Typically, weather patterns are much more favorable at this
time and seasonal milk increases are much more noticeable.
This year, increases are being reported, although much lower
than previous year comparables.  The milk quota yearend is
near and early projections are that possibly Denmark, The
Netherlands, and typically Italy will be above quota levels,
while the majority of countries are below.  A new quota year
begins April 1 and another 1% increase will occur.  The milk
quota program in Europe will terminate with the April 2014 -
March 2015 fiscal year.  Milk handlers are projecting that for
most of the countries that are below quota levels, economics
of milk production is the leading factor to milk output not
attaining quota levels.  Traders and handlers of manufactured
dairy products are speculating that another milk powder tender
may be in the near future.  Many feel that they will be better
able to bid on this possibility.  Many felt that the recent
tender's delivery timeline limited their participation.  A new
intervention year began March 1 and at this time, no butter or
skim milk powder has been offered into the program.
Intervention inventories continue to run in the 250,000 MT
(551,150,000 pounds) plus category for skim milk powder and
over 75,000 MT (165,345,000 pounds) of butter.  Some volume of
both of these products is committed to domestic food programs.

EASTERN OVERVIEW:  Typically, Eastern Europe is behind Western
areas in weather patterns and milk production development.
This year is no different and in most instances, behind on
early spring trends.  The winter season had cold temperatures
and measurable snowfall, thus it is taking longer for spring
like conditions to develop.  Milk production remains
seasonally low and deliveries to manufacturing facilities are
behind projections.  Manufacturers and handlers are quite
interested in the possibility of another milk powder tender
and that they may be able to participate to a larger extent
that the recent tender.

0930c steve Schneeberger  (608)250-3204

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STAT News Service