This is how the milk supply in Europe is moving

Last year, milk production showed a slight decline for the first time since the abolition of the European milk quota in 2015, according to figures from Eurostat. This trend will continue for the time being in the first half of 2022. From January to April, production within the euro zone amounted to 48,2 million tons, a decline of 0,6%. What is striking is that the shrinkage is mainly occurring in the large dairy farming countries of Europe. We list the trends in the six largest countries, in order of production volume.

Germany drops back to 2017 levels
The developments in Germany, the largest producer in Europe, are perhaps the most important with regard to price formation on the dairy market. There has been a decline all year, prompted by dairy farmers retiring. In the first quarter the contraction was limited to 1,5%, but in April this increased to 2,7%. In that month, milk production amounted to 2,68 million tons. This means that German milk production is back at the level of 2017. 

Shrinkage in France is increasing
French dairy farmers collectively milked 2,1 million tons in April, a decrease of 2,6% compared to last year. This causes the shrinkage to build up. On average, the decline was 1,4% in the first four months of this year. The declining milk production is probably a result of the drought in France. The drought is not limited to the southern provinces, but the dairy region of Normandy is also experiencing a rainfall shortage. In the meantime, France has had some rain again, but not enough to solve the problems. What also demotivates French dairy farmers from production is the low milk price, which for many processors hovers just above €40.

Netherlands: Shrinkage recedes in May
The Netherlands is currently the only country that has submitted the supply figures for May to Eurostat. There has been a contraction of 2% in the first five months of this year. However, in May the contraction was only 0,8%, bringing production to its seasonal peak at 1,2 million tonnes. The figures are flattering, because last May milk production in our country showed a clear decline for the first time, only to fall well below the long-term average in June. However, in recent weeks there have been reports that the supply is slightly more positive than previously estimated. Whether the milk prices, which have now risen to €55 per 100 kilos, will provide an incentive to increase production will have to be seen in the coming months.

Growth in Italy
In Italy, milk production does show growth figures, which amounted to 0,4% in the first four months. In April, production amounted to 1,14 million tons, pushing up milk production that month. This surprising increase is difficult to explain. This may be related to favorable spring weather or the increase in milk prices. The coming months will reveal whether growth will continue or whether the increase in April was an incident. Italy has less influence on the European dairy market, because the country hardly exports. At most, the country will ask for less liquid product from Northwestern Europe in the coming months, which is common during the tourist season.

Polish production continues to grow steadily
Poland is the only country among the five largest dairy member states that has managed to achieve serious growth figures. In the first four months the average growth was 2,4%. This makes Poland the country that is growing the fastest in terms of tonnages, a trend that has been visible for some time. We previously wrote that Poland will eventually surpass the Netherlands if the current trend continues. In April, the production increase of more than one percent was slightly smaller than the previous month.

Irish people break negative trend in April
In Ireland, milk supply in the first four months was 0,7% below last year's level. However, the Irish appear to be breaking with the negative trend, because in April supply exceeded the 2021 level for the first time. Production that month was 1,08 million tons, which represents a narrow increase. The Irish processors pay milk prices that are well above €50, which may provide an incentive to increase milk production.