EU dairy product availability remains tight

By Patty Clayton

Dairy markets in the EU-27 have seen strong price increases in recent months, as limited growth in milk supplies has constrained production of most dairy products. The exception to this is cheese, where higher volumes have been produced. Production volumes of butter and milk powders were down on the year, although reduced export volumes have, in some cases, helped to offset lower manufactured volumes.

In the first half of the year, cheese production increased by 3% compared to Jan-Jun 2020. This was at the expense of butter and milk powder production as there was no growth in milk supplies off farms. For butter, the drop in export volumes was sufficient that available supplies* were 3% higher on the year. However, for both skim milk powder (SMP) and whole milk powder (WMP), availability tightened.

Weak milk production growth continued into Q3, limiting any significant increase in product manufacture. While cheese production still showed some growth over the quarter, it was at a lower rate than in the first half of the year. However, availability of cheese was supplemented by reduced exports.

For butter, Q3 production was mixed among the key producing nations. France, Ireland and the Netherlands had higher production than in Q3 2020, but Belgium, Germany and Poland produced less. Overall total EU-27 butter production was 11,500 tonnes lower than last year in the quarter. Improved export performance meant availability tightened further in Q3, falling below year earlier levels by 2%.

Meanwhile, tight supplies of milk powders coming into the third quarter meant exports of both SMP and WMP were down on the year. While this improved availability on the domestic market in the quarter, it was not enough to offset the reductions in the first half, and has meant available supplies remained tight for the year to date (Jan-Sep).

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