EU production expected to dip, says USDA Foreign Agricultural Service

The European Union semi-annual report released by the US Department of Agriculture’s Foreign Agricultural Service (FAS) predicts a drop to 148.9 million metric tonnes (MMT) in milk production this year, from 149.3 MMT in 2023.

This is a result of declining cow numbers and lower milk production profitability, the FAS says. The trend has eliminated smaller and less efficient farms. The decrease will also be seen in factory use consumption, where it is expected to drop by 0.3%. “This is requiring dairy processors to carefully decide for which products they will use the available milk,” reports Anna Galica of the FAS Warsaw office.

Cheese remains the top product made in the EU, with solid domestic consumption and strong export demand driving this. It is expected to hit 10.62 MMT, up 0.6% from 2023. Also driving the cheese sector is both exports and hospitality and tourism, where the former’s growth saw a 3.6% increase in exports, and should expand in 2024 by 2.1%, up to 1.4MMT. A growing popularity of speciality cheeses is benefiting EU exporters, the FAS notes.

However, this will come at the expense of butter, non-fat dry milk (NFDM) and whole milk powder production, according to the FAS. Butter is set to drop by 2.1% to 2.07 MMT in 2024, while NFDM will decrease by 5.8% to 1.4 MMT, with the latter seeing weakness due to lower milk availability and reduced exports due to less Chinese demand. NFDM exports are down by 7.6% versus 2023 levels, and domestic EU demand has also dropped due to the lower use by the food processing industry, as higher prices for cocoa beans reduces demand for NFDM for chocolate production.

Galica says that the EU dairy sector continues to have concerns connected to the new Common Agricultural Policy and the EU Green Deal directives, which are negatively weighing on farmers’ decisions to continue production.

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