European Dairy Market Summary

MADISON - Sep 12/13 - 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 trends are steady to
seasonally lower in Western Europe.  More countries are finding
milk output at levels closer to year ago levels.  Conditions are
favorable for farm production.  Processors are concerned about
the effect that higher milk prices will have on upcoming milk
output.  There are high pricing levels being paid by processors
having to cover needs for fresh products.  This is pulling milk
out of manufactured production.  Cream demand remains good and
some processors are selling cream instead of making butter.  The
returns are very favorable.  There is active demand for fresh,
cream based products.  Dairy product prices held mostly steady
this reporting period.  The fluctuating Euro remains an issue
with export values.  The relative pricing points make butter and
butteroil challenging to export.  Values for skim milk powders
and whole milk powder are in line with Oceania and getting more
interest.  Buyers are seeking coverage for both near term and
fourth quarter needs.  Their challenge is to assess the need to
have product in hand versus what the future pricing will be.
Whey demand is more unsettled with some buyers out of the
market.  Offerings and stocks remain mostly light.
EASTERN OVERVIEW:  Milk production in Eastern European is steady
with recent weeks.  Weather conditions have been neutral at the
farm level.  Milk supplies are seasonally adequate for
processors.  Dairy product demand is fair to good.  Some buyers
are finding pricing points more attractive and utilizing sources
that meet their approval.
0930c Butch.Speth@ams.usda.gov 608.278.4152

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STAT News Service