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USDA: Dairy market conditions Western and Eastern Europe

Mar 13: WESTERN EUROPE: The international market is fairly quiet, partially attributed to potential conflict concern in the Middle East. While some inquiries have been noted from the Middle East, most are simply checking availability and price. The inability to acquire the necessary insurance coverage has hampered recent interest from the Middle East. Other reports indicate that some countries in the region but outside the potential conflict area, are currently just not issuing the necessary letters of credit. A few exporters speculate that the EU may soon adjust export subsidies based on the stronger Euro, at least compared to the U.S. dollar.

Milk producers in EU countries such as France have been reducing milk shipments to stay within their annual quotas and/or to minimize over-quota penalties. This has reduced many current production schedules. However, producers in other countries such as Germany and the Netherlands have no such quota problems. Shipments into intervention programs are expected to be light into April. Through March 7, producers offered 928 tons of skim milk and 2,945 tons of butter into intervention. Current milk intakes are otherwise trending higher seasonally. Exporters in the region expect to be the major source of new business due to the reduced production in Oceania and the filling of most (all but butter) DEIP GATT year quotas for the U.S. Exporters are aware that many buyers expect prices to ease lower seasonally into spring.

Mar 13: EASTERN EUROPE: Current milk intakes are increasing seasonally but only limited quantities of product for export are being produced. Part of the recent Algerian tender results have reportedly been sourced from Poland. Producers in Poland are expecting a good spring season for milk production while others producers in other countries are less optimistic.

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