European Dairy Market Summary

MADISON - Mar 29/12 - 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

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WESTERN OVERVIEW:
The European 2011 - 2012 milk quota year is coming to an end at the
end of March.  Reports are indicating that there are probably two
countries that are experiencing over quota volumes, Austria +4% and
Germany +0.7%.  Some countries are very near quota levels with most
well below.  Late winter and early spring weather patterns throughout
Western Europe have been very positive for a strong start to the new
milk production season, thus it has been a challenge for those
producers near quota levels to maintain their output until now.  Total
milk volumes are reported to be running much stronger this year when
compared to last year.  This trend is not only occurring in Europe,
but also in other international dairy markets.  The Oceania milk
production season is winding down, but is having a positive finish to
the current season with milk volumes up 4% in Australia and 9% in New
Zealand when compared to the previous season.  U.S. output is also
running much stronger than the previous year with February output
running 4.6% ahead of a year ago in the 23 surveyed states.  As milk
production increases in Europe, manufacturing schedules are also on
the increase.  It is still early in the new season, thus plant
capacity is not a problem, but some milk handlers are keeping a close
eye on milk volumes as they increase seasonally.  Traders and handlers
are indicating that stocks of manufactured dairy products are
available for domestic and international buyer interest.  Some
international sales are being reported, but for the most part, sales
activity is occurring for an internal market.  The upcoming Easter
holiday is pulling additional milk volumes into fresh product
production for holiday needs, especially cream based products.  Butter
churning activity is building seasonally and clearances of butter
stocks to PSA are increasing.  At the March 22 Dairy Management
Committee meeting, published data indicated that nearly 21,000 MT of
butter have cleared to the program since it opened on March 1.  This
volume compares to 14,100 MT in 2011 and 5,400 MT in 2010.

EASTERN OVERVIEW:  Milk production increases in Eastern Europe are
being reported, but not at the pace of Western counterparts.
Typically, this region lags Western regions by 6 weeks or so, although
signs of increases are occurring which are earlier than in recent
years.  Stocks of manufactured dairy products are available and often
priced lower than Western offerings.  Traders and handlers are hopeful
that international buyer interest will resume as milk volumes and
finished product volumes increase.

0930c steve Schneeberger  (608)278-4154

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STAT News Service