March 4, 2005

European milk production remains slow

Milk producers in Europe continue to monitor their milk marketings as the milk quota yearend nears. By the end of March, handlers and traders feel that milk volumes will not be at quota levels for producers in many of the member states. During the current quota year, milk output has been lagging last year and this trend continues during the winter months. 

Milk handlers report that winter weather conditions, measurable snow and cold temperatures, prevailed during recent weeks, which are stymieing milk production growth.  Intervention has now opened and some small volumes of powder have been offered to the program. 

Traders and handlers feel that some volumes will clear to the program, but domestic and international buyer interest should clear surplus offerings without the maximum intervention levels being attained. 

Traders report that international buyer interest is gaining momentum.  They also indicate that international supplies are limited to the point that European stocks will probably be actively sought during the upcoming months.  Buyers are looking for shipments as early as April and are reaching well into the summer months.  Many of these buyers have been absent from the market for quite some time and are now in need of dairy products once again. 

Stocks of product are available for near term shipment with new stocks available soon as the milk production season gains momentum.  European traders are looking forward to active sales in the coming months.