European Dairy Market Summary

MADISON - Jul 19/12 - 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 is seasonally declining throughout
Western Europe accelerated by adverse weather conditions in some
regions.  Hot temperatures in areas of Eastern and Southern Europe,
coupled with wet conditions in Ireland, the UK and areas of Western
Europe are all contributing to cow discomfort and stress.  In areas of
very wet conditions, some farmers are choosing to house the milking
herd at this time versus continuing to graze, thus saving pasture
conditions.  Supplemental feeding is occurring and often is not
generating as positive of a milk flow as if the herd was on pasture.
Although milk production trends are easing, overall milk production
continues to run 2 - 2.5% heavier than last year at this time.
Declining milk volumes are causing some milk processors, when
possible, to realign milk direction at this time to products of most
need or best returns.  Cheese production remains positive as the milk
flow declines with exports remaining strong.  Traders and handlers are
indicating that dairy product sales are occurring both internally and
internationally, but most are centered within the European community.
Sales activity at this time of the summer typically slows as many
buyers and consumers are on summer holiday.  Stocks of product are
available for buyer inquiry, but appear to not be as excessive as in
other years at this time of the season.  Butter stocks continue to
clear to PSA.  This program opened in March and will remain open for
about 4 more weeks.  Since March 1 and through the end of June,
104,484 MT of butter have cleared to the PSA program.  This 2012
clearance compares to 76,579 MT last year at this time and around
80,000MT in 2010.

EASTERN OVERVIEW:  Milk production trends in Eastern Europe are also
on the down side of the season.  Hot temperatures in some regions are
causing the milk flow to decline at a faster pace than others,
although overall milk volumes are keeping manufacturing facilities at
manageable levels of production.  Stocks of manufactured dairy
products in Eastern Europe are available, although some manufacturers
and handlers are indicating that overall stock levels are not as
positive as they have had in other years.  Sales activity is being
reported, but international sales are lighter than in previous years.
Traders and handlers are speculating that lighter sales activity might
be occurring due to firmer than desired prices by buyers, but then
also indicate that tightening international supplies might encourage
buyers to return to European sources for their needs.


9:30c steve schneeberger   608-278-4154

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STAT News Service