Search our website enhanced by Google.
Lower EU milk supplies tightens availability
Wednesday, 4 December 2019
By Patty Clayton
Trends in wholesale pricing on EU markets have differed across products, with both SMP and WMP moving up through the year, cheese holding steady and butter declining. These trends appear to be closely linked to the ease in which product can be sourced, particularly for SMP and butter.
While there is no publically available data on stock levels for dairy products, looking at how available supplies[1] have changed year on year can provide some insight into whether supplies are plentiful or not.
Cheese
Available supplies of cheese have remained relatively stable over the past year (12 months to Sep-19), as both production and trade patterns have been roughly on par with year earlier levels.
There has been a slight upturn in export volumes, but this has only had a small impact on total available volumes.
Butter
There has been some growth in availability over the twelve months to Sep-19, but this was relatively limited at 2%.
Most of the additional product is thought to be held as stocks. After the volatility seen in butter prices between 2016 and 2018, there are reports of a significant shift away from dairy butter from food manufacturers, seriously impacting demand from this segment of the market.
The increasing availability will be putting downward pressure on prices.
Skim milk powder
Prices for SMP have been rising steadily through the year, following a five-year declining trend.
Lower production, combined with a 28% upswing in exports, has kept availability tight within the EU, resulting in the steady rise in prices seen since mid-2018.
Whole milk powder
For WMP, less product was manufactured in the period, but availability increased as exports dropped by 16%.
Despite higher available supplies, prices have been pulled up by the rising SMP prices, as well as good demand levels.
[1] Available supplies measures the total volume of product available to the market (production + imports – exports), but cannot split out what has been sold (consumption) and what is held in stocks.
Sign up to receive the latest information from AHDB.
While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.
All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk © Agriculture and Horticulture Development Board. All rights reserved.