Report 39 – Released on September 26, 2019

WESTERN OVERVIEW

Early indications are that September milk production in much of Western Europe is in a typical pattern of seasonally declining. Early observations in Germany suggest that it bucked the normal seasonal patern with a weekly increase before the general decline resumed. Some observers believe the late August heat will have yielded a decline over August last year when official August data is released. The return to better weather in September seems to have slowed the decline in many countries, rather than result in an increase.

European Union milk production during July this year was up 0.5 percent from milk production during July last year. Milk production this year January ± July, is up 0.3 percent from the same period in 2018, accoriding to Eucolait. The overall increase occurred notwithstanding decreases in most of the top milk producing countries. The aggregate increase was achieved due to increases in smaller milk producing countries. While YTD milk production has lagged early 2019 expectations, a mitigating factor is that for the first half of 2019, on a milksolids basis, EU milkfat increased 1.1 percent from last year and protein increased 1.4 percent. This has contributed to increased production of butter, cheese and SMP in the EU during 2019.

Milk production results in the top five producing countries for 2019 are shown in the following table, with countries listed in descending order from most, to less, milk production.

2019 Western European Milk Production
                     Percent Change
     Country         July YOY  YTD

     Germany         -1.2      -0.7
     France          -0.8      -1.1
     United Kingdom  +2.7      +2.8
     Netherlands     -1.5      -2.6
     Italy           -0.3      -1.1

some cheese buyers with contracts have been rebuffed in attempts to increase short term deliveries beyond contracted volumes. Existing contracts are being filled but generally there is not any more cheese available for customers who ask. Most current cheese production is committed. In Western Europe, consumer demand and industrial demand is strong. Exports are very robust. Cheese manufacturers are limited by seasonally decreasing milk supplies. European Union cheese production during July this year was up 0.8 percent from cheese production during July last year.

Cheese production this year January ± July, increased 0.2 percent from the same period in 2018, accoriding to Eucolait. Results in the top four producing countries for 2019 are shown in the following table, with countries listed in descending order from most, to less, cheese production.

2019 Western European Cheese Production
                     Percent Change
     Country         July YOY  YTD

     Germany         +1.9      +1.8
     France          +1.1      -0.4
     Italy           +4.7      +0.5
     Netherlands     -4.5      +3.2

     EU cheese exports January - July 2019, 496,903 MT, increased 2 percent from January - July
     2018, according to Eurostat.

     EU CHEESE EXPORTS ± TOP 3 DESTINATIONS
                  MT              PERCENT CHANGE
     DESTINATION  Jan.-July 2019  Jan.-July 2019/2018

     USA          76,473          +7
     Japan        66,750          +5
     Switzerland  36,901          +1

EASTERN OVERVIEW

Milk and cheese production for some top Eastern European member states of the European Union are shown below. The data is from Eurostat.

2019 EU Eastern European Milk Production
                     Percent Change
     Country         July YOY  YTD

     Poland          +1.0      +2.1
     Czech Republic  -0.2      +0.8
     Hungary         +1.0      +0.7
     Lithuania       -0.9      -0.4

     2019 EU Eastern European Cheese Production
                     Percent Change
     Country         July YOY  YTD

     Poland           +3.7      +0.7
     Czech Republic   +2.6      -1.1
     Hungary         +16.7     +15.8
     Lithuania        +0.3      -5.8

     Information for the period September 16 - 27, 2019, issued biweekly

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

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