June 11, 2005

European milk production seasonal peak passed

European milk producers are indicating that the seasonal peak for production has passed and volumes are now in a decline. Up to this point, milk output patterns have been quite positive. 

Internal trading activity in Europe is about steady with previous years, but international trade is slow and rather passive.  Firm prices, limited refunds for sales activity through the end of June, and the unknown for post June transactions are limiting sales negotiations.  European traders indicate that some trading activity is occurring for those that possess refunds which are valid through the end of the month. 

The recent subsidy cut for milk powders has proved to have little impact on sales negotiations. The weak and unstable Euro against the US dollar is also a factor that traders and buyers have been putting up with.

In Eastern Europe, milk production is mostly at peak levels. Volumes of milk are comparable with last season, although if more hot/dry conditions prevail, peak volumes might drop quickly.  Manufacturing schedules are seasonally active with more products being cleared to warehouses versus end users.