EU dairy product availability mixed in Q1 2023

Thursday, 13 July 2023

EU dairy product availability remains mixed in Q1 2023 compared to the same period in 2022. Available supplies of butter, cheese and whole milk powder (WMP) increased year on year while that of skimmed milk powder (SMP) declined. Milk production in EU in Q1 2023 remains almost flat (0.08% increase) over the previous year at 34.42bn litres. Lackluster demand in the domestic and global markets due to inflationary pressure is the main factor driving product availability in most markets.

The increase in available butter supplies was mostly driven by higher production and imports from the EU. There was a downwards movement in EU milk prices in Q1 2023 after prices had firmed up in the latter part of 2022. These lower prices bolstered butter production.

In addition, the EU also saw greater availability of cheese supplies. Production of cheese increased year on year while imports declined. Lower exports also meant an increase in cheese stocks.

Availability of SMP supplies declined by 20.6% year on year in Q1 2023. Production was higher by only 2.4% and exports picked up by 32.6% year on year. SMP prices noticed correction in Q1 2023 compared to December thereby resulting in higher exports.

WMP production declined by -3.5% year on year in Q1 following almost flat milk supplies. Farmers were optimizing their production systems but were reluctant to commit to long-term expansion plans. As such there was modest increase in milk supplies so less need to make powders. Imports of WMP increased by 22.7%. A decline in exports, paired with that growth in imports, meant more WMP about, despite the drop in production.

EU product availability

1 Available supplies = production + imports - exports

Image of staff member Soumya Behera

Soumya Behera

Senior Analyst (Dairy)

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