Milk deliveries and prices drop in Austria

Austrian milk prices have dropped. The dairies and cheese factories paid their milk suppliers an average of 36.39 cents/kg in May. Compared to April, that was a decrease of 0.79 cents and the Agrarmarkt Austria (AMA) estimates that the milk price for June was at 0.36 cents/kg. The decrease in prices is due to lower demand for ingredients and the impact of the Covid-19 pandemic.

The Austrian dairies handled over 289,435 tons of raw milk from suppliers in May.

Milk deliveries were 1.1% below the same month last year. Since August 2019 it has been observed that the monthly milk delivery was always slightly above the comparable period of the previous year, this trend was interrupted with the May delivery.

Company-specific programmes and calls from processors to cut back on milk deliveries are now being seen in the supply chain. Production at the Austrian dairies adapts to the changed demand due to the coronavirus crisis. Simultaneously with increasingly strict coronavirus measures and the subsequent lock-down, the Austrian milk supply reached its peak (in May) due to the season. Dairies and cheese factories appealed to their suppliers to cut milk deliveries in March.

The catering sector and wholesale trade, as important buyers of dairy products, have completely disappeared with the lockdown and exports have also partially come to a standstill. By shifting production in response to changing demand, the local dairies were able to process the milk into non-perishable products.

The production adjustment is evident in the drinking milk area. The big winner in the drinking milk segment is UHT milk (long-life milk). In March an increase of 49% was recorded compared to the same month in the previous year; production rose 39% in April and 11% in May. This was due to stock purchases due to the Covid-19 spread.

The production of fresh milk developed in completely the opposite direction, since the accumulated household supplies of UHT milk and other products bought in stock also had to be used up again. As early as March, the volume of fresh milk sold around 8% less than in the same month of the previous year. In April the production of fresh milk was reduced again (-12%) and in May, production was down by 17% compared to the previous year. In May 2020, it was around 4.3 million kg.

Sour cream and soft cheese showed growth in production in all three spring months compared to the same period in the previous year. Sour cream production rose particularly sharply in March by 25%) and May (+ 20%).

The largest production plus for soft cheese was recorded in March (+ 19%). It was not only fresh milk that was negatively affected by the redistribution, sweet cream and hard cheese were also among the losers.

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