Analysis Milk
Will Poland overtake the Netherlands in EU milk ranking?
Milk supply is under pressure in many European countries. This trend will also continue in the first months of 2022. The fact that the European milk lake 'only' declined by 0,3% in the first quarter is mainly due to the advance on the eastern flank of our continent. The position of the Netherlands as the third largest dairy country in the Union is at stake.
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Let's start close to home. Of the top 5 largest dairy member states within the European Union, the Netherlands is the leader in terms of shrinkage. Milk production here shrank by more than 2% from January to March and the production volume in April was also significantly lower. The shrinkage in Germany and France is between 1% and 2%, but in terms of tonnages the shrinkage is greater than here. In fourteen of the 27 Member States, milk production is shrinking, i.e. slightly more than half. This also includes major producers such as Ireland, where milk production is in the red for the first time in years.
The growth is mainly in Eastern Europe. Production in Poland increases by almost 3%. The Baltic states also write green figures. It is also striking that Belgium, Denmark and Italy are among the growth countries. The growth in Belgium is striking, because the trend there often moves along with the Netherlands.
Shift to Eastern Europe
It can be said that European milk production is moving eastwards. This can be explained by the better production methods that are applied there. Moreover, there is more room for growth with regard to land and environmental space. It seems to be a matter of time before the Netherlands becomes the third largest dairy member state in the EU. After all, numbers 4 (Italy) and 5 (Poland) are expanding, while the milk pool in the Netherlands is shrinking. The shrinkage in the Netherlands has so far been organic, but this may accelerate if the government starts buying up dairy farms to reduce emissions. Production in the Netherlands is still approximately one million tons of milk ahead of Poland, but the differences are rapidly closing.
Back to the European milk supply figures. For the time being, there is a downward trend this year, which continues the trend that started last year. The European Commission expects milk supplies to shrink until the summer. There may be a cautious recovery later this year. Despite the relatively high milk prices, dairy farmers are keeping their foot off the accelerator. This is due to the sharply increased feed and fertilizer prices, which has barely improved the margin. However, the first milk prices for June continue to rise rapidly, which may make it more attractive to increase production.