European Dairy Market Summary

MADISON - Aug 2/12 - 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: The milk production season throughout Europe
continues to trend lower at varying rates.  Weather conditions are the
main factors that are influencing the rate of decline.  Hot
temperatures in southern regions and cooler/wet conditions in northern
regions are the main factors in production declines.  Milk output
declines in Ireland are greatly influencing milk volumes and
logistics.  In some instances, manufacturers and handlers are
adjusting the milk flow of one product line and to another.  This is
causing some manufacturers and handlers to realign commitments and
potentially alter delivery schedules.  Although milk output is on the
downside of the season, overall milk volumes are running around 2%
ahead of last year at this time.  Stocks of manufactured dairy
products are available, but often not at levels of previous years.
Buying interest, both domestically and internationally, is quite
stable for this time of the summer.  Typically, for the period of July
- August, Europe goes on holiday and sales slow, but this year
suppliers and handlers are indicating that sales appear to be more
active than usual.  Cheese exports remain active and sales continue to
be reported for cheese destined for European holiday areas.
International sales are holding up quite well also.  At the most
recent European Dairy Commission meeting, a request to resume export
subsidies was presented by the Polish Council and endorsed by the
Lithuania Council.  After discussion and consideration, the Commission
denied the request on the grounds that current marketing conditions
did not support such a move.  There are two types of subsidies
depending on the commodity, a fixed subsidy and then implementation of
a tendering system that would be at levels other than the specified
levels for the various commodities.  Butter stocks continue to clear
to PSA.  This program has been open since March and will remain open
until August 15 or about 2 more weeks.  Since March 1 and through July
22, 118,777 MT of butter have cleared to the program.  This clearance
is 35% more than last year's 87,800 MT for the same period.  As of
August 16, early offered volumes that have been in the storage program
for the specified period of time can start to be removed for
commercial needs or commitments.

EASTERN OVERVIEW:  Milk production in Eastern Europe is trending
lower, but is holding up stronger than many of their Western
counterparts.  Weather patterns are also impacting the pace of decline
with hot temperatures and wet conditions being reported in this
region.  As milk volumes decline, manufacturing schedules are easing,
but remain at manageable levels with minimal logistic problems at this
time.  Stocks of manufactured dairy products are available for buyer
interest, although some suppliers feel that overall volumes might not
be as plentiful as in years past.
9:30c steve schneeberger   608-278-4154

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STAT News Service