Report 29 – Released on July 18, 2019

WESTERN OVERVIEW

With official data now available, January-May EU milk production is ahead of the same period last year, up 0.3 percent according to CLAL data provided to USDA. This increase occurred in spite of declines in the top two milk producing countries, Germany and France.

 EU COW MILK PRODUCTION CHANGE

                     Jan.- May  Jan.- May
                     2019/18    2019

     COUNTRY         Percent    2019 MT
     Germany          -0.4      13,767,000
     France           -1.6      10,716,000
     United Kingdom   +2.8       6,663,000
     Netherlands      -2.7       5,821,000
     Italy            -1.8       5,285,400
     Ireland         +11.5       3,330,000
     Belgium          +1.9       1,809,000

Western European observers expect a higher percentage annual milk prodiction increase by the end of 2019. Some projections are for up to 1 percent. Reaching 0.3 percent through May is more a reflection of the cumulative drag from weak outcomes early in 2019, than a continuing situation. Getting from 0.3 percent through May, to 1 percent through December will still require many things to go right, or at least, not to go wrong.

Mid summer signs seem favorable. The recent extreme heat wave now seems to have been a blip which production bounced back from once tempersatures moderated and rains fell. Earlier spring rains had left pastures in decent shape moving into summer. Feed prices in Western Europe are at a level allowing dairy producers to boost production through use of quality feed.

Observers expect that through the rest of 2019, the strongest milk production increases will be led by Ireland, Denmark, Poland and the United Kingdom. In addition to favorable pastures and crops in those countries, dairy producers seem responsive to prevailing milk pay prices. Germany and France are expected to remain steady a bit above last yearśs milk production.

Cheese markets within Western Europe are described as balanced. Seasonal variation in varieties manufactured are noted. Less sliced cheese is currently available because large manufacturers are working on filling demand from Italy for pasta filata cheese. Recently some manufacturers have also decided to work toward rebuilding stocks of aged cheese drawn down in times of lower than expected cheese production. There are signs that aged cheese stocks are notching back up, which may help profitability in the future when sold as aged cheese.

January-May EU cheese production, 4,020,000 MT, is ahead of the same period last year, up 0.2 percent according to CLAL data provided to USDA. Strong cheese export demand coupled with internal EU demand will keep cheese as a favored use of milk through 2019. That factor is expected to move annual cheese production up from the current 0.2 percent increase before 2019 ends.

EU CHEESE PRODUCTION CHANGE

                     Jan.- May  Jan.- May
                     2019/18    2019

     COUNTRY         Percent    2019 MT
     Germany          +1.8      1,003,000
     France           -0.3        720,000
     United Kingdom   -0.5        203,000
     Netherlands      +1.9        376,000

EASTERN OVERVIEW

Milk production this year through May recorded increases over last year in many Eastern European countries.

EASTERN EUROPEAN COW MILK PRODUCTION CHANGE

                     Jan.- May  Jan.- May
                     2019/18    2019

     COUNTRY         Percent    2019 MT
     Poland          +2.9       5,163,000
     Czech Republic  +1.2       1,030,000
     Estonia         +4.2         322,000

Poland, the largest Eastern European milk producing country, also recorded production increases through May in various dairy products: butter, +1.0 percent; cheese, +0,3 percent; WMP, +2.4 percent; and SMP, +8.0 percent.

Information for the period July 8 - 19, 2019, issued biweekly

     Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: Eric.Graf@usda.gov

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