Milk production in EU continues to rise

From the publication shows that the European price for raw milk has remained on average above €34 per 100 kilos since the beginning of the year. There is stable demand for dairy products from the EU, a lower supply from the main EU competitors, favorable weather conditions and positive pricing.

Production growth almost 1%
Milk production in the EU is expected to increase by almost 2019% in 2020 and 1. Ireland, Poland, Denmark and Great Britain are the growth countries, while production in France and Germany is expected to remain stable. The trend that milk processors are increasingly focusing on growth in added value rather than volume could have a dampening effect on production growth.

Also an increase in skimmed milk powder
In 2019, the European intervention stock of skimmed milk powder was completely exhausted and private stocks fell significantly. It is expected that this will bring an additional 225.000 tons of skimmed milk powder onto the market. Nevertheless, due to continued demand, both in Europe and beyond, production growth is expected to reach almost 2019% in 3.

The average price for skimmed milk powder in the EU has increased by almost 2019% since the beginning of 20 and is at the highest level since January 2017. In mid-June the price was €2.044 per tonne. Nevertheless, the EU remains competitive. Until April, EU exports amounted to almost 350.000 tons (+34%). Exports to China, Indonesia and the Philippines have more than doubled. At the same time, exports of skimmed milk powder from the US, the EU's main competitor, fell by 15%.

EU exports of skimmed milk powder are forecast to grow by 2019% in 14. Given the lower inventories at the beginning of 2020, production can grow further (+5%) to meet global demand, but exports will decrease by more than 10%. Volumes are expected to remain above pre-crisis levels.

More competitive on the butter market
With the falling butter price, the EU is expected to become more competitive on the world market. This will ensure a 5% increase in exports and a further increase in European use (+1%) in 2019.

Less whole milk powder
Despite rising global demand for whole milk powder, production in the EU fell in the first 4 months of 2019. China, the largest importer, increased imports (+33%), but only 1% was of European origin. The seasonal decline in milk production in New Zealand is expected to offer the EU some market opportunities. Nevertheless, a 15% drop in exports and a 5% drop in production are expected this year.

Increasing demand for EU cheese
Cheese exports from the EU grew by 4% in the first 2019 months of 3. This is mainly due to export growth to the most important sales markets: US (+7%), Japan (+18%) and Switzerland (+2%). Due to the further growth in demand for EU cheeses expected in 2019, both on the internal market (+0,5%) and outside (+3%), production will grow by 1%.

Declining production of drinking milk
Production of fresh dairy products in the EU is expected to decline by 2019% in 0,2. This is due to the continued decline in milk consumption in the EU. Consumer milk accounts for 25% of the internal dairy market. In contrast, EU exports of drinking milk grew in the first 4 months of 2019, especially to China (+24%).