European Dairy Market Summary

MADISON - Feb 19/04 - 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

OVERVIEW:  WESTERN EUROPE:  Several factors are affecting the European 
dairy market.  Producers in countries such as Germany, the United 
Kingdom, Denmark, and the Netherlands are trying to reduce their milk 
marketing to minimize their over quota volume and penalty for the 
quota year that ends March 31.  Otherwise milk production seems to be 
increasing seasonally though the pattern does not yet seem to be quite 
as pronounced as usual.  Internal EU producer milk and dairy product 
prices are steady to mostly lower seasonally.  Export prices, 
expressed in dollars, fluctuate considerably day to day.  However, 
when priced in Euros, internal prices are frequently lower.  With the 
EU set to expand by adding countries in May and reducing internal 
dairy product prices in July, producers and exporters are cautious and 
somewhat confused about inventory positioning and price forecasts.  
The EU commission is only putting out export refunds on dairy products 
through April 30 shipment, which affects exporters trying to make the 
long term deals that some buyers prefer.  The strong Euro compared to 
the U.S. dollar and the limits of export refunds on butter sales to 
the U.S. may delay, at least short term, butter(fat) sales to the U.S. 
 Butter is moving into intervention in Germany, Ireland, Italy, and 
Spain with current expectations of large volumes being offered.  A new 
intervention scheme for butter starts March 1.

EASTERN EUROPE:  Current export activity is quiet due to supply.  Limited 
feed availability is affecting milk receipts in some Baltic countries. 
 Supplies of dairy products are currently limited.  Milk production 
seems to be increasing seasonally.  Supplies available for export are 
minimal.  

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STAT News Service

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