European Dairy Market Summary

MADISON - Jul 5/12 - 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:  Milk production in Western Europe continues to
decline seasonally.  Milk output varies from country to country in the
E.U., but overall volumes are running about 2% ahead of last season at
this time.  Milk producers and handlers are indicating that milk
production this season developed well and remains positive at this
time of the summer.  As milk volumes decline, manufacturing plant
capacities are not as stressed as they were earlier in the spring.  At
this time, when possible, plant managers are able to shift milk
volumes from one product to another for better returns or need.
Traders and handlers are indicating that stock availability varies
from product to product.  Butter stocks are sufficient for domestic
needs with volumes continuing to clear to PSA.  As of June 24th,
99,574 MT of butter have cleared to the PSA program since March 1.
This volume compares to 72,839 MT last year at this time.  The PSA
program will remain open for about 6 more weeks and will close on
August 15.  On August 16th, volumes that have been retained within the
program for the specified period of time can start to be removed.
Last year, over 100,000 MT of butter cleared to the program during the
open season.  Butter traders are indicating that International buyer
interest is limited as European prices are often higher than buyers
are willing to pay.  Skim milk powder volumes are available, but not
excessive.  International sales have been active in recent weeks, but
are not as aggressive at this time.  Prices were starting to increase
and buyers returned to the market at that time, but now have backed
away.  Whole milk powder stocks are available and are basically
clearing through internal or domestic markets as prices are often
higher than international buyers are willing to pay.  Traders and
handlers of manufactured dairy products are indicating that buyer
interest, both domestically and internationally, is projected to start
to ease as the summer vacation season gets underway.

EASTERN OVERVIEW:  Eastern Europe milk production remains strong as
milk volumes start to decline from seasonal peak levels.  Milk volumes
remain readily available to manufacturing facilities which continue to
run at or very near capacity levels.  Traders and handlers are
indicating that international sales were more aggressive a few weeks
ago when prices were starting to firm, but now this buyer interest has
eased.  Stocks are available, although not as readily available as
previously projected.


9:30c steve schneeberger   608-278-4154

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STAT News Service