European Dairy Market Summary

MADISON - Jul 22/10 - 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:  Milk production in Europe continues to trend
seasonally lower.  Recent hot temperatures and dry conditions are
accelerating this trend in many regions.  Milk volumes are now
tightening and manufacturers are trying to procure as much as they
can and generate stock for future needs.  In most instances, supplies
of manufactured dairy products are available for immediate and future
needs.  Often these stocks are not as heavy as desired, although
traders and handlers do indicate that buyer interest is not that
aggressive anyway.  Traders state that buyers are cautious with their
purchases.  Some near term sales are being reported, although longer
term or larger sales are not being reported.  Prices for most all
manufactured dairy products continue to increase.  Butterfat remains
tight and prices for butter and anhydrous milk fat reflect that
situation.  Although prices at the recent gDT event in the Oceania
region earlier this month trended sharply lower, this trend did not
flow through price structures in Europe, at least at this time.  Most
traders and handlers feel that European prices will be able to
maintain themselves for the foreseeable future.  Intervention butter
that has been sold back to the trade is now starting to become
available on the commercial market and is helping ease the tight
butterfat situation.  At the Dairy Management Committee meeting on
July 22, no major dairy issues were adjusted or discussed.  There
were no accepted bids for intervention butter or skim milk powder.
Of the volume of intervention butter that was available for sale, all
volumes have been sold with about 1,700MT left and no intervention
skim milk powder has been sold at all.


EASTERN OVERVIEW:  Milk production in Eastern Europe is also trending
lower, accelerated by heat and dry conditions.  Milk volumes for the
season are basically in line with previous years with fluctuations
higher and lower being reported.  Eastern manufacturers and handlers
are stating that stock is available for buyer interest.  At this
time, sales are slow and unaggressive which is typical for this time
of the summer.  Traders feel that buyers are stepping back from the
market at this time as prices in other regions of the international
market are trending lower.


0930c steve Schneeberger (608)278-4154

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STAT News Service