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USDA Dairy market conditions Review of WESTERN AND EASTERN EUROPE

OVERVIEW: WESTERN EUROPE: The major topic within Europe is the continuation of record setting temperatures and its impact on the agriculture community. Temperatures in the 36 - 39 degrees celsius (90 - 100 degrees fahrenheit) range continue to be recorded early in the week, although some moderation is starting to develop at midweek. As far as dairy is concerned, the impact appears to not be as significant as many anticipated. Milk production is declining seasonally, but most anticipated that the heat would accelerate this decline. Declines remained quite gradual, but within the past week to 10 days, they appear to be sharper. Crop conditions are really showing the impact of high temperatures and spotty rainfall. Feed supplies for the upcoming winter season are a concern for dairy and livestock producers. Some farmers harvested their grain crops when green for silage versus lose them to predicted weather conditions and are pleased that they did.

Many dairy producers indicate that they should be in pretty good condition for winter needs with carryover stocks from last season and some forethought before the heat and adverse conditions of recent weeks. On August 13, the Dairy Management Committee released information that the threshold of 109,000 mt of skim milk powder into intervention has been breached. They also indicated that on August 15, they would be announcing a tendering system for future offerings. This will only be in place for a short time as intervention closes August 31. Recent offerings have slowed greatly and many producers, handlers, and traders feel that additional offerings will be minimal, if any at all. International buying interest remains slow. Stocks of manufactured dairy products are available for both domestic and international buyer interest.

EASTERN EUROPE: High temperatures are also being recorded in Eastern Europe. Milk production patterns throughout this region during the current season have not been overly positive. A recent report indicated that, for the first six months of this year, milk output in Russia was down 2.3% while output in the Ukraine was down 4.2%. Stocks of manufactured dairy products are reported to be available, but precise figures were not available. Some Russian buyers are looking to Western Europe for butter to supplement their production.

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