European Dairy Market Summary

MADISON - Jul 8/10 - 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:  The European milk production season is now on the
down side of the year.  Milk processors and handlers are stating that
although the season got off to a slow start, milk volumes quickly
caught up with previous year levels and, for the most part, are at or
slightly higher than last year at this time.  Cheese production was
the product of most milk clearance through peak levels, but now
cheese output has eased and other manufactured products are able to
once again enhance their production schedules.  Butterfat continues
to be the product of most tightness.  At the July 8th Dairy
Management Committee meeting, no significant dairy issues were
adjusted or announced.  Sales of intervention butter were reported
with all skim milk powder bids again being rejected.  The commission
accepted bids for 210 MT of intervention butter at levels around
3,610 Eruos per MT ($4,548).  This sale leaves about 1,734 MT of
intervention butter left.  There were some butter bids that were
rejected.  All 3,000 MT of skim milk powder bids at prices ranging
1,850 - 2,150 Euros per MT were rejected.  Many traders and handlers
were surprised at the volumes of skim powder bids, especially when
European stocks are building.  Many European traders and handlers are
questioning what impact the sharply lower prices realized at the July
6th global/Dairy Trading event may have on their prices.  For the
most part, they feel that these sharply lower prices will not have a
significant effect, although the drop is sending a weaker market tone
message to the marketplace.  Many are also stating that this is an
auction and that any auction activity is a function of the
participants and that a sharp decline at this time could quickly
reverse itself during the next event.  Traders and handlers state
that sales activity is slow, typical for this time of the year.  At
this time, the summer holiday season is beginning, which typically
slows buyer interest.  Stocks of product, outside of butterfat, are
readily available for domestic and international buyer interest.


EASTERN OVERVIEW:  Milk production in Eastern Europe is also at or
slightly beyond peak levels.  Milk volumes are reported to be in
fairly good balance with need.  Summer temperatures and humidity
levels are starting to be reported in many Eastern European countries
which could quickly reduce milk production trends.  European
producers and handlers state that stocks are available for both
domestic and international buyer interest.  Up to this point, sales
activity has been fair at best.

0930c steve Schneeberger  (608)278-4154


0930c steve Schneeberger (608)278-4154

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STAT News Service