Germany’s MIV expects lower milk production

The German Milk Industry Association (MIV) says the milk volume in Germany has increased continuously in the last weeks of 2019 with mild winter weather and in accordance with seasonal development. The previous year’s line was last exceeded by 1.1 %.

“The milk market has stabilised in the past year, the fluctuations of previous years have subsided. The signs for the milk market in 2020 are good, even if the increasing protectionist tendencies within the EU and worldwide will pose challenges for the trade in milk products – this year and the next decade,” concludes Peter Stahl, who is chairman of the association.

Overall, however, raw milk production in Germany in 2019 is expected to be slightly below the previous year. At the same time, the fat and protein content of the milk delivered was higher than in previous years.

The latter is in line with developments in the EU-28. EU milk deliveries in the past year were slightly higher than the previous year at 0.5%, not least due to strong increases in only a few countries. For the German milk producer price, the MIV expected an annual average of €0.335 to €0.34/kg raw milk (4.0% fat, 3.4% protein) for 2019. The 2018 price at 0.344 cents/kg is therefore unlikely to be fully achieved. Overall, milk prices in 2019 tended to move sideways.

“If you consider the volatility of the past few years, better prices for sustainable milk production are essential so that milk producers and dairies can meet the increased requirements,” the MIV chairman states.

“Two points were decisive for the market development in 2019: butter has become significantly cheaper than in previous years and skimmed milk powder prices have recovered strongly,” explains Stahl. He continues, “Butter prices in the EU have been at their lowest level in three years but continue to exceed the long-term average. ”

In Germany, butter consumption stabilised in 2019 due to lower prices, while demand in other EU countries and exports also rose slightly.

After an unusually long period of weak prices, the prices for SMP rose significantly in the course of 2019 and were thus able to compensate for the lower prices for butter.

With stable production and stimulated demand, the intervention stores have been cleared and EU exports are now expected to reach a historic high of almost one million tons of skimmed milk powder.

Most of the cow’s milk produced in Germany is processed into cheese. This development continued in 2019 and is expected to lead to a new record in cheese production.

Consumption in Germany is still high, and there is considerable cheese demand for international trade.

Consumer behaviour is interesting, when it comes to drinking milk: while customers asked for less drinking milk overall, organic drinking milk (+8.6%) and pasture milk (+14.8%) scored above average. For the first time, more than 10% of German drinking milk is organic milk.

At the beginning of 2020 there are signs of firmer price developments and thus better producer prices than in 2019. There is no international expansion of milk production, while the demand for milk and milk products remains good.

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