Mixed bag for EU product availability

After a year of low milk supplies and rising energy costs, shifts in the production and trade of dairy products in the EU has resulted in a mixed bag for availability[1]. In the 12 months to August, milk production has been in decline, with cumulative deliveries 0.7% behind year earlier volumes. Production of butter, cheese, skim and whole milk powders have, as a result, all seen year on year reductions. However, changes in trade have benefitted supplies in some markets.

Butter production for the 12 months to August was down on the year by 3.2%, while cheese production[2] saw only a marginal reduction (-0.1%). While imports of butter increased, volumes were not sufficient to offset the drop in production, leading to reduced availability for the 12-month period. For cheese, supplies available to the market were supported by a reduction in exports.

Meanwhile, available supplies of milk powders have improved for both SMP and WMP. Lower milk supplies saw production of both drop in the year to Aug22, with SMP down 2.4% and WMP down by 8.7%. However, significant reductions in exports, combined with higher import volumes, has driven increased availability for the period. EU powder exports have been constrained by uncompetitive prices, especially in the WMP market. It is possible that production of powders could continue to drop as the year progresses as high processing costs and potentially limited supplies of energy make powders less economical.

[1] Available supplies are estimated based on production + imports – exports

[2] 2022 EU cheese production has been estimated to adjust for the absence of production data from Ireland

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