European Dairy Market Summary

MADISON - Aug 14/14 - 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:
Western European dairy markets were dealt a blow this past week, when Russia
blocked EU dairy exports from coming into the country.  In 2013 Russia
accounted for 33% of EU cheese exports, 25% of EU butter exports, and 27% of
EU AMF exports.  Total EU exports into Russia in 2013 are estimated to equal
1.5% of EU's milk production.  The full ramifications of the dairy export
blockade on the EU markets have yet to be realized.  The most immediate
effect has been lower fluid milk prices on the spot market.  European Union's
agricultural commissioner is holding meetings this week and next to determine
how best to assist EU farmers.  Dairy market trading was light prior to the
Russian sanctions, but has all but halted following the announcement.  Most
market participants are taking a measured wait and see approach.  Lower dairy
commodity prices are anticipated by many market participants as, once Russia
bound, dairy products attempt to find new buyers.  Milk production is
declining along the seasonal trend, but above year ago levels.  Weather
conditions are mostly favorable across most regions of Europe with plentiful
feed and forage supplies.  According to ZMB estimates, June milk deliveries
in the EU were 4.3% higher than a year ago.
EASTERN OVERVIEW:
Eastern Europe milk production is declining, but volumes remain over year ago
levels.  Cow comfort levels are good and producers are receiving good return
and attempting to maximize milk production.  Manufacturing schedules for
butter, skim milk powder and whey continue to be active.  Polish whey has
seen some increased export interest.  Some market participants feel the
Russian export ban will more severely affect Eastern European countries.
Baltic dairy farmers and cooperatives are asking the EU agricultural
commissioner to take measures to counter the Russian sanction.
0930c rick.whipp@ams.usda.gov 608.278.4151
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: www.marketnews.usda.gov/portal/da

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STAT News Service