EU-28 Milk Production Update – Mar ’15
According to Eurostat, Jan ’15 EU-28 milk production finished lower on a YOY basis for the first time in 19 months, finishing 0.1% lower than the previous year. Monthly production growth has decelerated throughout the fourth quarter of 2014 and into 2015, with the YOY growth rate declining in four consecutive months. YOY declines in production were led by Germany (-38,170 MT), France (-37,170 MT), the Netherlands (-22,400 MT) and Ireland (-20,240 MT). Production in Italy remained significantly higher than a year ago (+84,700 MT) while the U.K. (+14,100) and Hungary (+11,780) also experienced YOY gains in production. Production growth remained strong throughout the first three quarters of 2014 due to high milk prices, favorable weather, expanding dairy herds and more than adequate feed and forage supplies. More recently, lower farmgate milk prices, the Russian ban on EU dairy exports, and the likelihood of levee payments for exceeding milk production quota levels have resulted in decelerating milk production. Culling rates have increased in Europe as many producers are culling their lower producing cows. Germany, Belgium, the Netherlands, Denmark, Ireland and Poland have all trended over quota levels. Despite the poor recent production growth, ’14-’15 YTD EU-28 production remains up 3.2% throughout the first ten months of the production season. EU-28 milk production quotas expire at the beginning on Apr ’15, likely resulting in continued growth in milk production throughout the ’15-’16 EU-28 milk production season.