Northern hemisphere peak curbed as farmers cut production

Tuesday, 21 July 2020

By Patty Clayton

Lockdowns across Europe and North America occurred just as dairy farmers in the northern hemisphere were approaching their peak production season. With the loss in demand from foodservice markets, markets were severely disrupted with knock-on effects on milk deliveries.  

This year however, average daily deliveries fell as farmers curbed production in response to processors’ requests. The largest annual drop in deliveries occurred in France, where average daily deliveries were down by 2% on previous year levels. The provision of direct aid for suppliers who limited production will have helped to incentivise French farmers to reduce supply to ease pressure on the processing sector.

While there were no official production reduction schemes in either the US or the UK, requests for farmers to reduce production by processors, along with lower pricing, led to drops of 1.1% and 0.8% in May deliveries respectively. Dry weather in the UK during May could also have contributed to the lower production levels.

In the other key producing regions of the EU, milk production was not curtailed to any degree. In fact, in Ireland, where the processing sector is geared up to deal with a strong seasonal increase in deliveries, production increased compared to 2019.

Patty Clayton

Lead Analyst - Dairy

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