European Dairy Market Summary

MADISON - Feb 16/12 - SNS -- Dairy market conditions in western and eastern Europe were reviewed in the latest report on the sector released by the USDA today.

Winter has arrived in Europe.  During the past two weeks, very low
temperatures have been reported in many Western European cities and
regions.  Temperatures dipped to very low levels, often lower than
usual, but not as low as areas of Eastern Europe where temperatures
reached record lows.  In Western Europe, milk producers and handlers
report that the cold temperatures did impact the milk flow, but many
feel that the season is so new, that this situation should have
limited negative impact on overall milk output.  Milk producers,
especially those that are closely monitoring their milk output due to
quota limitations, are stating that the cold snap may slow the
momentum that was developing for the new season and should help with
overages in countries such as Austria, Denmark, Germany, and possibly
Ireland.  Producers in these countries have about 6 weeks left to
monitor and manage their milk sales before the March 31 quota year end
arrives.  Winter conditions continue, but warmer temps are being
reported.  A new Intervention and PSA year will soon begin.  As of
March 1, Intervention will open.  No product cleared to the program
last year, but approximately 43,000 MT of skim milk powder are still
in intervention possession, but the powder has been committed to the
Most Deprived Persons Feeding Program for distribution.  A significant
portion of intervention skim milk powder has already cleared to this
program with the balance of the holdings scheduled to clear within the
new intervention year.  Again, traders and handlers are not expecting
any significant, if any, volume of skim to clear during the upcoming
open season.  Also on March 1, PSA for butter will open.  This program
will remain open until August 15, at which time, butter offered to the
program can be withdrawn.  The contractual storage period for the
butter is 90 - 210 days, depending on the time the butter entered the
program.  Fixed cost storage aid per ton will be 14.88 Euros per ton
and per day contractual storage aid per ton will be 0.26 Euros per
ton.  Both of these aids have been reduced from last year.  Traders
and handlers are reporting that sales activity is slow.  Many are
attributing this trend to weaker prices and buyers are standing back
from the market place when possible until the market situation
EASTERN OVERVIEW:  Cold/winter weather conditions prevailed over much
of Eastern Europe during the past two week.   Milk producers and
handlers report that a negative impact on milk production will be
little felt as overall milk output in this region was already at
seasonally low levels.  For those producers that were starting to
realize output increases, the winter conditions slowed development.
Traders and handlers report that sales activity has slowed.  Buyers
are cautious with their purchases as prices adjust, often lower.
Stocks of previous year production continue to be available for
immediate or near term shipment.
0930c steve Schneeberger  (608)278-4154


STAT News Service