USDA European Dairy Market Summary Saturday, Oct 11, 2003
OVERVIEW: WESTERN EUROPE: Milk receipts are declining seasonally within the EU. Milk receipts for the current season are about even with last season overall though lower in countries/areas most affected by the summer heat and drought. Winter feed availability and generally higher feed prices are a concern for many farmers. Culling animals to adjust to feed supplies is another option. Some producers still have feed left over from last year and this should reduce the problem. Current dairy product markets are steady in Europe based on Euros, but quotes are often higher when quoted in U.S. dollars.
The recent strength of the Euro relative to the weak U.S. dollar may adjust quoted prices by $30, depending on product, in just a couple of days. Some effort is underway to try to convert potential international buyers to base price quotes in Euros. Butter prices are firmer and intervention markets are only open in a few smaller markets due to market prices above intervention levels in the majority. Extremely limited supplies of butteroil make price quotes nominal. Good export interest is still noted from Russia as well as Japan. Export demand has also firmed for skim and whole milk powder. Algeria recently came out with a new tender for December/January delivery, reportedly seeking quotes on skim, whole milk, and butteroil.
EASTERN EUROPE: Milk receipts continue to decline seasonally. Summer heat and drought reduced milk production in the region. Dairy product inventory within the region is limited. Parts of the region also face winter feed availability concerns. Some exporters were reportedly forced to default on contracts due to supply related shortages caused by the drought.