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WESTERN EUROPE: The late season spurt in milk production has been referred to as a "second peak". Although this volume was not as high as the spring flush in all countries, milk receipts were heavier in many. Germany and The Netherlands reported higher production trends, while Ireland and France were not as strong. Milk quotas are being looked at in many of the countries that are realizing significant increases and producers in some of the countries are already looking at what will they have to do to adjust their deliveries before March 31, 2004. This late season increase in milk volumes allowed for some unexpected increases in manufacturing schedules which enhanced inventories in many parts of Europe. Up to that point, stocks were not that plentiful and now handlers and traders have product to work with. International buying interest remains slow.

Some recent sales have been reported for shipment later in the year. Some traders are indicating that buyers are taking a wait and see attitude to long term commitments. Buyers are aware of European conditions and overall supplies, but question to what extent will Oceania sources be in the coming months. At this point, milk production in New Zealand is ahead of last season by 3 - 4%, but in Australia, milk output is 8% below a year ago. The Euro continues to fluctuate against the U.S. dollar. This is causing buyers and sellers much unsettledness in negotiations of potential sales, although in recent days, the Euro/dollar relationship has been more favourable than just last week.

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