EU milk supply to go down

Erhard Richarts, Dairy Market Conultant, presents some key highlights of the first half of 2017 EU dairy market.

• The seasonal growth of EU milk production will be accompanied by trailing behind 2016 volumes until the mid of 2017. Also milk supplies of the Southern hemisphere’s major exporting countries are supposed to be less than in the first half of the year before, whereas the expansion of the U.S. is forecast to continue.
• In the domestic market of the EU only a modest increases of dairy consumption can be expected, mainly in the cheese sector.
• The demand of importing countries for dairy produced in the EU will continue to grow.
• Prices of butter are moving at historical high and significantly above the intervention level, further increases cannot be ruled out.
• The space for rising prices of skim milk powder will be limited by the tenders offering intervention stocks.
• Contract cheese prices have still to catch up to returns of the cash market prices.
• Producer milk prices will stay at levels reached at the end of 2016 in the next months and not follow the usual seasonal decline.

Read the full version of the report:

Source: EU Dairy Markets, Situation and Outlook, December 2016 by Erhard Richarts, Dairy Market Consultant, Chairman of IFE (Institut für Ernährungswirtschaft e. V., Kiel)