European Dairy Market Summary

MADISON - Aug 28/14 - 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:
European milk production is declining in the typical seasonal manor with
increases over year ago levels diminishing.  European dairy markets moved
lower as the Russian ban on European imports, weighed on markets.  The
embargo was implemented for one year and will have the greatest impact on
cheese exports.  The Netherlands, Germany, and Denmark were major cheese
exporters to Russia in previous years.  There has been relaxation of the ban
to allow imports for lactose free products, which are in short supply in
Russia.  The decline in cheese exports to Russia will most likely lead to
increased production of butter and skim milk powder.  European milk
production increases in the first half of 2014 resulted in expanded
production of milk powders with marginal expansions in cheese and butter.
Butter production increases were not as robust, due to lower butterfat levels
in milk deliveries.  According to Eurostat, January-June production of dairy
products showed butter up 2.9% and skim milk powder up 9%, compared to year
ago levels.  The increases in manufactured milk products expanded volumes
available for export with increases primarily in milk powders and butter.
Eurostat reported EU-28 January to June milk deliveries are 5.1% higher than
same period 2013.  Various member states showed the following January to June
increases, compared to last year; Germany, 3.6%; France, 6.2%; UK, 10.7%;
Belgium, 8.1%; Italy, 2.8%; and Ireland, 7.3%.  January-June milk delivery
data showed increases for all countries in Western Europe with the exception
of Spain -1.0%, and Greece -5.9%.
EASTERN OVERVIEW:
The Russian ban on EU cheese imports has been felt especially hard in the
Eastern European countries of Poland, Finland and Lithuania.  Some countries
have requested various measures of relief from the European Commission, but
getting measures agreeable to all will be difficult.  Milk production
continues to be active with good weather and more than adequate feed and
forage supplies.  Eastern European milk deliveries for January-June, reported
by Eurostat, showed the following year over year changes for selected
countries; Poland,+7.6%; Lithuania, +8.7%; Latvia, +12.8%; Estonia, +8.9%;
and the Czech Republic, -0.7%.
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