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MD DA100 EUROPEAN DAIRY MARKET OVERVIEW

MADISON, WI. November 12, 2009 (REPORT 45)

WESTERN AND EASTERN EUROPE

WESTERN OVERVIEW:  Milk production in Western Europe continues to 
decline seasonally and often is running behind last year 
comparable figures.  Milk output is nearing seasonal low levels. 
 In parts of Western Europe, cool and wet conditions are being 
reported which is very typical for this time of the season.  As 
milk volumes decline, so are manufacturing schedules.  In most 
instances, milk is being directed towards products of most need 
or best return.  Traders and handlers state that stocks of 
various dairy products are limited to the point that prices 
continue to rise for a supply driven market.  Traders and 
handlers are making adjustments to their marketing and sales 
strategies following the removal of most export subsidies.  
Traders indicate that there is buyer resistance at the higher 
prices.  Some traders and handlers anticipate that a major buyer 
might be returning to the marketplace in the very near future and 
they are preparing to see how they might be able to participate 
in the buyer's inquiry.  At the November 5 Dairy Management 
Committee meeting, all common export refunds were reduced to zero 
except for butter and butteroil which were reduced by 61%:  82% 
butter is now 145 Euros per MT; 80% butter, 141.5 Euros; and 
butteroil is 175.6 Euros.  In recent weeks, no butter or skim 
milk powder has been offered to the intervention program and 
intervention skim milk holding total 267,458 MT and butter totals 
are 76,449 MT.  PSA butter holdings total 136,080 MT.        

EASTERN OVERVIEW:  Eastern European milk production is also 
nearing seasonal low levels and typical late season weather 
conditions are also being reported.  Manufacturing facilities 
throughout the region are gearing back processing schedules with 
some operations already shuttered for the winter season.  In many 
instances, current production and inventoried stocks are being 
utilized locally with export activity lighter than anticipated.  
        
 
0930CT steve Schneeberger  (608)250-3204