European Dairy Market Summary

MADISON - Jun 7/12 - 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

WESTERN OVERVIEW:  For the most part, Western European milk production
has peaked and declines of varying rates are being reported.  Weather
patterns are quite typical for this time of the season.  Temperatures
fluctuate from hot for a few days and then more seasonal/comfortable
the next week or so.  Milk producers and handlers are indicating that
current weather patterns are not having a negative impact on milk
output at this time.  Pastures are green and moisture is sufficient to
maintain steady growth.  Overall milk production in Western Europe is
reported to be slightly ahead of last year at this time, but not
significantly.  Traders and handlers are stating that producer stocks
are in close balance with needs and they are comfortable with this
situation.  Manufacturing facilities are at or very near peak
capacities processing seasonally high milk volumes.  Currently, stocks
are basically committed with sourcing potential needs challenging for
some traders.  Dairy products prices are starting to show more signs
of strength and buyers, especially international buyers, are returning
to the marketplace for their needs.  Traders and handlers still do not
have a good grasp of the total volume of milk powder that will be
clearing into a recently finalized dairy product tender.  Many are
speculating that Europe will fill a significant portion of the skim
milk powder being sought and will be part of the whole milk volume
with South America also filling whole milk needs.  Churning schedules
remain active and production is often outpacing demand thus butter is
clearing to PSA, versus producers holding the surplus.  From March 1
through May 27, nearly 80,000 MT (176.4 million pounds) of European
butter have been offered into PSA.  This clearance compares to nearly
52,000 MT last year at this time.  It appears that about 1/3 of the
butter in PSA storage has come from The Netherlands, with Germany,
France and Ireland contribution about 20%.

EASTERN OVERVIEW:  Eastern Europe milk production is now at peak
levels throughout the region.  Some milk handlers are indicating that
increasing receipts are not occurring and total milk volumes appear to
be slightly lower than last year at this time.  Milk is clearing to
most all manufactured dairy products, although powder offerings appear
to not be as plentiful as projected.  Some milk handlers are
indicating that cheese production is strong for this time of the
season.  Whey powder markets are firm with most buyer interest
centered around an internal EU demand versus internationally.


9:30c steve schneeberger   608-278-4154

---

STAT News Service