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USDA DAIRY MARKET OVERVIEW

OVERVIEW: WESTERN EUROPE: Late in the milk production season, reports indicate that milk output is gaining some momentum in many European countries. Early reports indicate that output is running ahead of last year at this time. Some milk handlers are speculating that the milking herd is recovering from the stress of the record setting temperatures this past summer. Favorable fall weather conditions are also contributing to extending life of pastures and forage crops. Although in some regions, farmers are already switching to late fall/winter feeding rations, also contributing to an upturn in milk volumes.

This additional strength in overall milk production is providing manufacturing facilities some welcomed additional milk. Butter/powder and cheese production are the main products that are realizing some increased, or at least stable, late season production runs. At this point in years past, powder has often been sold back to the trade out of intervention, but this year, it is not the case. Some powder has been sold, but not to the extent of previous years.

The Euro continues to fluctuate on a daily basis at relatively high levels against the U.S. dollar, thus making it difficult for many European traders to successfully negotiate sales. Although sales are difficult finalize, a recent sale of 15,000 mt of skim milk powder destined for Algeria for delivery late this year and early 2004 has been reported.




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