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Trade flows impact on dairy product availability
Thursday, 23 June 2022
The combined effects of reduced milk production and constrained trade has impacted on the availability[1] of dairy products in the first quarter of 2022 in both the UK and the EU-27.
In the UK, milk deliveries have been lower on an annual basis since August 2021, and in the first three months of 2022, these were down by 1.9% on 2021. Fat and protein content was also slightly lower, meaning total solids production in the same period was down 2.4%.
For butter, lower production, combined with an increase in net trade (exports-imports) has seen availability of supplies drop in comparison to where things stood last year. Meanwhile, cheese supplies are in a similar position to last year overall, with just a small increase in availability in the first quarter.
For milk powders, there was an overall decrease in availability, due to lower production and a small shift in trade. Although imports and exports have not moved much compared to Q1 2021, they are both still considerably lower than pre-2021. The UK typically runs a trade surplus in milk powders, so it may be that the difficulties in shipping product – whether due to the increased administrative burden post-Brexit or the higher cost and lower availability of containers – has hampered exports.
Product supplies in the EU-27 show a similar picture for butter, but a drop in cheese availability. For butter and cheese, the main driver of tight product availability on the continent seems to be lower production levels, as trade balances were similar year on year.
EU milk powder availability was up year on year for the first quarter. This was due to a combination of lower production volumes (than last year) and a relatively large drop in exports.
[1] Available supplies are estimated based on production + imports – exports.
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