MD_DA106                                                         
DA                                                               
MD DA106 Skim Milk Powder - Europe                               

MADISON, WI.  March 30, 2017 (REPORT 13)                         

WESTERN EUROPE                                                   
INFORMATION GATHERED  03/20/2017 - 03/31/2017                    
U.S. DOLLARS PER METRIC TON, FOB PORT                            

SKIM MILK POWDER (SMP):        

	Skim milk powder prices in Western Europe weakened at each end 
of the price range. This continues a weaker trend.                                  

       Current SMP stocks still leave Europe oversupplied. Most sources 
do not expect an increase in SMP production during 2017, and possibly 
a decline. Current production is primarily to fill existing 
contracts. Manufacturers are making contract deliveries on time. New 
contracting has been quite slow in recent weeks. Buyers feel no 
pressure to lock in supplies or pricing due to the expected 
continuing price weakness and oversupply. In fact, preparations are 
underway for a new round of intervention sales.
       
       There is nearly universal agreement that only significantly 
increased exports can reduce SMP stocks, both intervention and 
privately held. Absent a robust increase in exports, there is 
apprehension that SMP stocks in Europe will increase during 2017. 
However, there is awareness of keen competition with the U.S. which 
has stocks of nonfat dry milk at favorable prices also seeking export 
markets. Some sources are suggesting that the volumes of intervention 
stocks involved can realistically best be reduced in the near term by 
donating stocks to help refugees or poor people in the Middle East or 
Africa.

       Western European SMP production during January this year was 
8.1% lower than January last year according to Eurostat. EU exports 
of SMP during January 2017 declined 7.8% from January one year 
earlier, according to Eucolait. Export volumes and primary 
destinations are shown in the following table:

Main Three Destinations 
Jan-Feb 2017 

Destination  	Quantity  % of Total  
Algeria 		 7,876  	13.8% 
Philippines 	 5,968  	10.5% 
Indonesia 	 5,701  	10.0%
                                                                                                   
1.25% BUTTERFAT:                         1,800 - 1,925           

0930c eric.graf@ams.usda.gov 
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home