European Dairy Market Summary

MADISON - Mar 4/04 - 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:  Milk production throughout Europe continues to
increase seasonally, but at varying rates.  The milk quota year end is
nearing, thus producers are closely monitoring their quota levels as March 31
nears.  Reports indicate that overall milk volumes are trailing 2002 levels,
although some producers are cutting back on their feeding programs to control
their milk marketings and quota year volumes.  Intervention for skim milk
powder is now open.  Milk handlers and manufacturers anticipate that offerings
will probably be active early on as producers within existing EU countries
clear stocks during the next two months prior to the additional of 10 new
countries and their potential offerings after May 1.  Butter intervention is
also now open.  Under a special opening of butter intervention during
February, about 6,000 mt of butter was offered which will not impact the
70,000 mt ceiling for the program.  Although not overly aggressive, some short
or near term trading activity is occurring prior to the end of April and the
discontinuance of export licenses at that time.  This is greatly impacting
potential sales activity, especially for those buyers that are looking toward
longer term negotiation.  Some buyer interest is occurring for butter from
U.S. importers.  Current firm prices and limited stocks in the States are
causing some importers to look to international markets for additional butter
supplies.  At this point, European prices are firmer than buyers are willing
to pay, thus much of this buyer interest is going unfilled.

EASTERN EUROPE:  Milk production in Eastern Europe is also increasing
seasonally.  Reports vary as to the strength at this time, but some countries
are experiencing heavier receipts for this time of the year versus previous
years.  Some sales activity has been reported out of Eastern Europe, although
prices remain higher than some buyers are willing to pay.

0930c steve schneeberger  (608)224-5084

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STAT News Service

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