Report 3 – Released on January 16, 2020

WESTERN OVERVIEW:

Much of Western Europe has experienced mild winter weather conditions. This has benefitted milk production in recent weeks. Dairy observers characterize early 2020 milk production as normal to slightly high. Early January milk production in Germany was 0.5 percent higher than the same time last year, according to ZMB.

Preliminary expectations for 2020 are for slight growth in EU milk delivery, assuminglargely normal weather. ZMB projects a 1.0 percent increase. That includes the leap year factor, with leap day projected to add 0.3 percent to the annual total. Most increased milk intakes are likely to go into cheese production.

The number of dairy cows in Germany has been declining. AMI cites data from the German Federal Statistical office counting 4.01 million cows in November 2019. That represents a 2.2 percent decline from November 2018. It is a 6.6 percent decline from the peak in 2014.

Cheese demand picked up in early 2020. Some cheese manufacturers say orders are particularly active. The velocity of new orders has exceeded manufacturer expectations. Deliveries had slowed over the late 2019 year end holidays. However, observers believe that final 2019 data will show EU cheese exports during 2019 reached a new record. Customers are now seeking to rebuild stocks. Export ordering has also increased. Until more milk becomes available to cheese manufacturers, the current order demand will keep inventories low. In fact, some manufacturers note that aging stocks have decreased since 2020 began – which is quite unusual in historic terms. New cheese manufacturing capacity was added in 2019, reflecting the EU emphasis on continuing to expand cheese production.

EASTERN OVERVIEW:

Eastern European milk production is described as steady at seasonally lower volumes. Decent winter weather is noted. Typical early year increases in production are still awaited this year. This is constraining dairy manufacturing, leading to some reliance on inventories to fill orders.

Information for the period January 6 - 17, 2020, issued biweekly

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

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