Dairy farmers in Europe are ramping up production

When it remained dry for weeks last summer, no one could have expected that the milk supply would show strong growth figures. The opposite is true. An unexpectedly productive late summer, combined with record high milk prices, encourages additional production. Although costs for dairy farmers have increased considerably, the high payment prices provide an incentive to significantly increase production.

Europe-wide there was an increase of 0,5% in September, while there was a contraction of 0,4% in the first months of this year. This means that production is being increased again in various countries. We list the excesses. 

Germany in the plus again
Perhaps the most striking increase is in Germany. In September, milk production amounted to 2,55 million tons, an increase of 1,23% compared to last year. This seems limited, but consider that production in April was still 2,5% behind last year. This means that German dairy farmers have significantly increased production, motivated by milk prices, which are also above the limit of €60 per 100 kilos in Germany. Looking at the first 9 months of this year, there has been a contraction of 0,9%.

French increase noticeable
France also saw an increase in September, by 0,5% to 1,83 million tons of milk. Looking at the first 9 months, there is still a contraction of 1,2%. The increase in France is striking, due to the extreme drought last summer. This reportedly caused many French dairy farmers to throw in the towel. Milk prices in France also lag behind the rest of Europe, but that does not stop them from scaling up production. 

Poland maintains steady growth
Unlike many other European countries, Polish milk production has been showing constant growth all year round. In September the supply amounted to 1,02 million tons, a growth of 2,5% compared to last year. The September supply also exceeded the million mark for the first time. Viewed over the first 9 months of 2022, growth is 2,3%. In addition to the stimulating effect of high milk prices, the Polish supply is not or hardly restricted by environmental legislation.

Ireland is returning to growth
Dairy farmers in Ireland were confronted with an unusual scene for them this summer: drought. This initially put a brake on production, but growth has now resumed. In September, supplies increased by 1,2% year-on-year to 809.000 tonnes. High milk prices also have a stimulating effect in Ireland. In addition, the Irish dairy farming industry is less sensitive to cost inflation. The sharply increased concentrate prices are less likely to have an impact, as Irish dairy farmers mainly use a (fresh) grass ration.

The Netherlands most opportunistic
The Netherlands is - surprisingly or not - one of the big growers. There has been an upward trend since June and it is getting stronger. The high milk prices encourage dairy farmers to increase production. The total milk supply for October amounted to 1.139,8 million kilos, which is 4,6% more than in the same month of 2021.

Belgians have a taste for things
Last but not least in this overview is Belgium. The supply there amounted to 364.000 tons in September, an increase of no less than 5,9%. In the first three quarters, supply grew by 2%. The sharply increased milk prices motivate Belgian dairy farmers to increase production. It is true that milk prices in Belgium are on the decline again in mid-November. The sharply increased supply may have something to do with this.