European Dairy Market Summary

MADISON - Aug 19/10 - 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 continues to
decline.  Milk volumes appear to be holding up quite well on the down
side of the season with early reports indicating that June's
production was 2% above the previous year.  On a year to date basis,
milk output is about par with last year.  Within recent weeks, heat
and humidity levels have been high in many regions and will probably
accelerate the seasonal decline.  August is summer holiday time for
many Europeans thus sales activity has been slow.  Traders and
handlers do indicate that Russian buyer interest continues, but often
European prices are higher than desired, thus some buyers are looking
beyond European borders for possibe stocks.  Whole and skim milk
powder, along with cheese are items of most interest.  Traders also
are stating that some new buyer interest is developing as buyers
start to look to fill fall/winter needs.  For the most part, outside
of butterfat, stocks are available for immediate and future needs.
Early in the milk production season, milk volumes were being directed
towards cheese output, but now other manufactured dairy products are
realizing a better milk flow.  The Dairy Management Committee will be
returning from summer holiday on August 26 for the first time since
late July.  Traders and handlers are wondering if the balance of
intervention butter (about 1,500 MT) will be cleared.  Butterfat
continues to be a limited item and previous sales of intervention
butter were a welcomed item by many.  Some butter/anhydrous milk fat
from the U.S. is potentially scheduled to arrive in Europe during the
next six months.

EASTERN OVERVIEW:  The milk production season continues to wind down
in Eastern Europe.  High heat and humidity levels of recent weeks are
not helping the milk flow during the down side of the season.  Milk
handlers are stating that milk receipts are declining gradually, but
also state that milk volumes are sufficient to maintain steady
manufacturing schedules.  Stocks of milk powders are available for
immediate and future needs.  As with their Western counterparts,
butterfat is limited in Eastern Europe.  Sales activity out of
Eastern Europe is slow as the summer holiday period continues,
although some traders are indicating that buyer interest is starting
to develop for upcoming fall/winter needs.

0930c steve Schneeberger  (608)278-4154


0930c steve Schneeberger (608)278-4154

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STAT News Service