European Dairy Market Summary

MADISON - Sep 25/14 - 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:
Milk production in Western Europe remains above year ago levels, but is
declining seasonally.  The relative strong production can be attributed to
good milk prices, favorable weather, expanding dairy herds and more than
adequate feed and forage supplies.  Recent market developments, causing lower
dairy commodity prices, are anticipated to reduce producer margins and
possibly lower production as farmers cull lower producing animals and
possibly extend drying off periods.  The fears of excess cheese supplies in
the EU, due to the Russian ban, have been abated with increased milk powder
and butter production.  The recent move by the European Commission to provide
storage assistance for milk powders and butter, via the PSA program, has seen
only marginal participation.  Significant volumes of skim milk powder were
sold via an Algerian tender and have put supplies more in balance.  European
dairy commodities have become more competitive in recent weeks with the
decline of the Euro, compared to the U.S. dollar.  Some U.S. banks are
forecasting further declines in the Euro in the coming weeks.  According to
ZMB, EU-28 preliminary data shows January-July milk deliveries 5.0% higher
than same period in 2013.  Various member states showed the following January
to July increases, compared to last year: Germany, 4.1%; France, 6.2%; UK,
10.2%; Netherlands, 3.4%; and Ireland, 7.1%.
EASTERN OVERVIEW:
Eastern European milk production shows fairly strong growth compared to year
ago levels.  Supplies of Eastern European cream have reportedly been moving
to Belarus, reducing cream shipments to Western Europe.  Butter production in
the first half of 2014 showed significant increases over previous year's
levels, according to ZMB.  Poland, Finland and Lithuania showed butter
production increases of 9.6%, 4.3% and 53.2% respectively.  Preliminary
Eastern European milk deliveries for January-July, reported by ZMB, showed
the following year over year changes for selected countries; Poland,+7.7%;
Baltic States, +9.6%; and the Czech Republic, -0.5%.
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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