European Dairy Market Summary

MADISON - May 8/03 - 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:  During the past two weeks, spring has finally 
arrived in many European countries, weather wise.  Warmer temperatures 
and rainfall are two factors contributing to more favorable early 
spring conditions than in past weeks.  Pastures are greening and cows 
are once again grazing, causing milk output to gain momentum.  More 
dairy plant managers are reporting growing milk volumes from one week 
to the next.  Production schedules are also on the increase at most 
locations.  International sales activity continues to be reported as 
slow and unaggressive.  A firm Euro against the U.S. dollar is adding 
to sales frustrations by producers and handlers.  At this time, with 
the Euro gaining strength on the dollar from one day to the next, 
traders and exporters are finding it very difficult to price and 
finalize any buyer interest.  Some producers and handlers are lobbying 
the EU Management Committee to increase export refunds in hopes of 
helping stimulate buyer interest.  The next management meeting will be 
May 15, but traders and handlers state that they do not necessarily 
have to wait for the meeting to announce an adjustment.  As milk 
production increases, thus is production of manufactured dairy 
products.  In many instances, due to a lack of international sales and 
a domestic market that is not keeping pace with output, new stocks are 
clearing to inventory.  Producers of skim milk powder are reporting 
that more are preparing powder for intervention offering.  Although 
this clearance is heavier than many anticipated earlier this spring, 
total volumes are still expected to not breach the 109,000 MT level 
during the open season.   


EASTERN EUROPE:  Milk production in Eastern Europe is starting to show 
more positive signs of seasonal increases than in past weeks.  Weather 
conditions in this region of Europe are also becoming more conducive 
to steady production growth.  Stocks of manufactured dairy products 
are low, although as milk output increases, thus will production 
schedules and stocks.  No significant new buyer interest is being 
reported from this region.


0930c steve Schneeberger  (608)224-5084

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STAT News Service

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