More milk in the EU, yet the market fears a shortage

To be precise, European milk production increased by 2024% to 0,9 million tons in the first six months of 75,4, according to Eurostat figures. In terms of tonnages, the increase was strongest in Poland. Production there increased by no less than 6% to 6,9 million tons. This means that the difference in production volume with the Netherlands is very minimal. In our country, supply fell by 1,4% to 7,04 million per tonne. It seems to be a matter of time before Poland overtakes the Netherlands as the third largest milk producer within the European Union.

The other countries in the top 3 are France and Germany; Here too, supply increased in the first half of last year. In France by 1,3% to 12,45 million tons, while German production increased by 0,2% to 16,6 million tons. Production also increased in Italy, the fifth largest dairy country in the eurozone, by 2% to 6,8 million tons. Of the major countries, only Ireland recorded a significant minus. Production there fell by more than 5% to 4,4 million tons. This decrease is mainly due to an extremely slow start to spring, due to a lot of rain and low temperatures. Production has now recovered considerably. In June, the milk supply was almost at last year's level.

Based on the production figures, you would not expect major concerns about the availability of milk. Especially because milk prices are on the rise across Europe, something that usually motivates dairy farmers to produce extra. Export figures outside the European Union are also behind last year. But nothing could be further from the truth. There is a lot of sentiment in the market in mid-August, mainly due to an expected shortage of milk. This is particularly evident on the butter market, where stocks have been tight all year round. Both butter and cream quotations have recently broken records. 

Dutch supply is dropping rapidly
Back to the milk supply and the concerns about availability in the second half of this year. Despite the increase in the first six months, these concerns are not unfounded. First of all, there is a seasonal decline, although this is an annual pattern and therefore not surprising. However, the decline could be faster than expected. This is due to bluetongue.

A good example of this is the milk supply in the Netherlands, where the virus has been active for a long time. In infected cows, production often halves or decreases even more. Moreover, it remains to be seen how quickly lactation will recover. The decline in milk production builds up rapidly: In July the supply was down in our country 3,15% below the level of the same month a year earlier. In June a decrease of 2,2% was visible, while in May 1,58% less was milked. 

Sources of infection in Europe
The virus is also spreading in other countries. In recent weeks, the bluetongue virus has spread exponentially in the Netherlands, Belgium and Germany. Hot spots have also been identified in France and Denmark. In Belgium, outbreaks have now been identified throughout the country. The situation is much worse than a year ago. Take Germany, for example, where only 23 outbreaks were identified last year and just under 2.000 cases have already been reported this year. This is also reflected in the milk supply figures reported per week by ZMB. In June, production was still above last year's level, but supply has since fallen below it. The same scenario is also plausible in the other affected countries, although this cannot yet be substantiated with monthly production data from Eurostat. 

Dairy farmers are being called on en masse to vaccinate, although the vaccines do not provide complete protection for cows. The virus is likely to continue to emerge in the coming months, as it may take some time before frost sets in and renders the midges harmless, although the larvae can withstand freezing temperatures. It is still difficult to estimate to what extent European milk production will be affected by the virus, but the concerns in the market are justified.