EU-28 Milk Production Update – Jan ’17
Executive Summary
EU-28 milk production figures provided by Eurostat were recently updated with values spanning through Nov ’16. Highlights from the updated report include:
EU-28 milk production declined on a YOY basis throughout the final months of the ’14-’15 production season as producers attempted to limit superlevy penalties for exceeding milk production quota levels but rebounded throughout the ’15-’16 production season in the post-quota environment. The Nov ’16 YOY decline in production was against record high levels experienced throughout the first year of post-quota production. Overall, ’15-’16 annual EU-28 milk production finished 4.0% higher YOY.
The European Commission’s €150 million voluntary milk reduction scheme, which was announced in July and came into force October 1st, likely contributed to the significant YOY declines in production experienced throughout recent months. The voluntary milk reduction scheme is expected to result in a 1.1% YOY reduction in total EU-28 milk deliveries in addition to YOY declines experienced throughout the four month period prior to the scheme coming into force.
YOY declines in production experienced throughout Nov ’16 were led by France (-153,620 MT), followed by Germany (-130,670 MT) and the United Kingdom (-87,100 MT). The aforementioned countries accounted for over 45% of the total monthly EU-28 milk production and over three quarters of the YOY production declines experienced during Nov ’16. YOY declines in production on a percentage basis were led by Belgium (-11.7%), followed by France (-7.6%) and Croatia (-7.4%), while increases on a percentage basis were most significant within Cyprus (+24.1%), the Czech Republic (+7.8%) and Bulgaria (+7.7%). Production within the Netherlands failed to finish higher on a YOY basis for the first time in 20 months during Nov ’16, finishing flat with the previous year.
Six of the top ten milk producing member states experienced YOY declines in milk production during Nov ’16, resulting in the top ten milk producing member states declining by a weighted average of 3.7% throughout the month. The top ten EU-28 milk producing member states accounted for over 85% of the total EU-28 milk production experienced throughout the month. Overall, 19 of the 28 member states experienced YOY declines in production volumes during Nov ’16.
Oct ’16 EU-28 beef & dairy cow slaughter declined on a YOY basis for only the second time in the past nine months, finishing down 0.6%. YOY declines in beef & dairy cow slaughter were led by the United Kingdom, followed by Germany and Poland.
Despite the most recent YOY decline, EU-28 bovine slaughter has finished higher on a YOY basis over nine of the past 12 months through October. USDA expects the EU-28 dairy cow herd to be marginally lower throughout 2016 but recent culling is expected to have a positive impact on future per cow productivity as lower producing animals are culled. Total EU-28 beef & dairy cow slaughter finished 1.3% higher YOY throughout the ’15-’16 production season and is up an additional 3.0% throughout the first seven months of the ’16-’17 production season.
- EU-28 milk production declined on a YOY basis for the sixth consecutive month during Nov ’16, finishing down 3.6%. The YOY decline in EU-28 milk production was the second largest experienced in over 24 years on a percentage basis, trailing only the 3.7% decline experienced throughout Oct ’16. The European Commission’s voluntary milk reduction scheme came into force at the beginning of October, likely contributing to the significant YOY declines in production experienced throughout recent months.
- Milk production declined on a YOY basis most significantly within France, followed by Germany and the United Kingdom. Overall, 19 of the 28 member states experienced YOY declines in production volumes during Nov ’16.
- EU-28 bovine slaughter rates declined on a YOY basis for only the second time in the past nine months during Oct ’16, finishing down 0.6%. ’16-’17 YTD EU-28 bovine slaughter rates remain up 3.0% YOY throughout the first seven months of the production reason, however, despite the most recent YOY decline.
EU-28 milk production declined on a YOY basis throughout the final months of the ’14-’15 production season as producers attempted to limit superlevy penalties for exceeding milk production quota levels but rebounded throughout the ’15-’16 production season in the post-quota environment. The Nov ’16 YOY decline in production was against record high levels experienced throughout the first year of post-quota production. Overall, ’15-’16 annual EU-28 milk production finished 4.0% higher YOY.
The European Commission’s €150 million voluntary milk reduction scheme, which was announced in July and came into force October 1st, likely contributed to the significant YOY declines in production experienced throughout recent months. The voluntary milk reduction scheme is expected to result in a 1.1% YOY reduction in total EU-28 milk deliveries in addition to YOY declines experienced throughout the four month period prior to the scheme coming into force.
YOY declines in production experienced throughout Nov ’16 were led by France (-153,620 MT), followed by Germany (-130,670 MT) and the United Kingdom (-87,100 MT). The aforementioned countries accounted for over 45% of the total monthly EU-28 milk production and over three quarters of the YOY production declines experienced during Nov ’16. YOY declines in production on a percentage basis were led by Belgium (-11.7%), followed by France (-7.6%) and Croatia (-7.4%), while increases on a percentage basis were most significant within Cyprus (+24.1%), the Czech Republic (+7.8%) and Bulgaria (+7.7%). Production within the Netherlands failed to finish higher on a YOY basis for the first time in 20 months during Nov ’16, finishing flat with the previous year.
Six of the top ten milk producing member states experienced YOY declines in milk production during Nov ’16, resulting in the top ten milk producing member states declining by a weighted average of 3.7% throughout the month. The top ten EU-28 milk producing member states accounted for over 85% of the total EU-28 milk production experienced throughout the month. Overall, 19 of the 28 member states experienced YOY declines in production volumes during Nov ’16.
Oct ’16 EU-28 beef & dairy cow slaughter declined on a YOY basis for only the second time in the past nine months, finishing down 0.6%. YOY declines in beef & dairy cow slaughter were led by the United Kingdom, followed by Germany and Poland.
Despite the most recent YOY decline, EU-28 bovine slaughter has finished higher on a YOY basis over nine of the past 12 months through October. USDA expects the EU-28 dairy cow herd to be marginally lower throughout 2016 but recent culling is expected to have a positive impact on future per cow productivity as lower producing animals are culled. Total EU-28 beef & dairy cow slaughter finished 1.3% higher YOY throughout the ’15-’16 production season and is up an additional 3.0% throughout the first seven months of the ’16-’17 production season.