EU-28 Milk Production Remains Strong – Jul ’14
According to Eurostat, May ’14 EU-28 milk production continued the recent trend of production growth, increasing 4.4% YOY. The 4.4% YOY increase was the lowest in six months however May ’14 milk production of 13.5 million MT (29.7 billion lbs) was the largest production month on record. EU-28 milk production typically peaks in May before declining seasonally until November. Apr ’14 EU-28 milk production was adjusted higher, from 6.6% to 7.2%, following the delayed reporting of France production. France, the second largest EU-28 milk producing Member State, increased its production by 10.0% in April. Production was down 1.4% in the first half of 2013 due to high feed prices, wet and cold weather and an early spring in major milk producing countries, however production increased 4.4% YOY from Jul ’13 – May ’14 as weather conditions and margins improved. The EU-28 ’13-’14 production season finished up 2.8% YOY, with additional increases in production expected as producers prepare for the expiration of the EU quota system in April 2015. According to USDA FAS, The EU-28 dairy herd’s long-term contraction trend appears to have stopped in response to strengthening farm-gate prices for milk and market expectations associated with quota expiration. Since 2000, the EU dairy herd has declined five million head, from 28.1 million head in 2000 to 23.1 million head in 2013, an 18% decline. In comparison, the U.S. dairy herd increased slightly over the same period. For 2014, EU dairy cow inventories are expected to increase which, combined with higher output per cow and favorable feed conditions later in the year, should spur an increase in total EU milk production.