Report 25 – Released on June 18, 2020

WESTERN OVERVIEW:

Western European milk production is in the seasonal decline phase. Production in Germany is reported to have been declining seasonally since the end of May. Some German plant managers believe milk output still exceeds 2019 at this time by about 1 percent. Gentle rain has been falling in most of Germany from last Sunday into Wednesday. This is expected to refresh pastures and crops, beneficially impacting milk production in early summer. Some French sources believe as of early June, French milk production is a bit over 2 percent ahead of 2019.

EU milk production January – April 2020 increased 2.3 percent from January – April 2019,according to CLAL data provided to USDA.

The cheese industry in mainstay countries such as Germany, France, Netherlands and Italy continues to roll along comfortably profitable. Cheese demand is strong, as it generally is.Orders are taking what can be produced. In most years, orders from southern Europe for July and August rise in expectation of a surge of holiday guests. The magnitude of such ordering is less certain this year. Nevertheless, there is confidence that cheese production not sold within the EU can be readily exported elsewhere.The current strength of demand helps manufacturers to be able to hold firm on pricing expectations. Buyers who hold back, hoping for weaker cheese prices, are believed likely to be disappointed and empty handed. Most buyers who now want to order cheese pay what they must to lock in supplies. Many in the market expect increasing cheese prices moving along in 2020.

Applications for Private Storage Aid (PSA) for cheese during the last reported week of the current program, June 8 – June 14, 2020, totaled 918 MT according to Eucolait. The total amount of cheese in PSA is 43,065 MT, 43 percent of the fill rate. Country allotments have maxed out for Ireland, Estonia, Italy, Sweden, Lithuania, and the United Kingdom. Belgium is 5 percent away from its allocation. Among the largest cheese manufacturers, Germany has used only 3 percent of its allocation. France has used 32 percent.

January – April 2020 cheese exports from the EU, 298,000 MT, increased 6.3 percent YTD according to CLAL data made available to USDA. Top importers, quantity imported, and percent change from the same period in 2019 include United States, 38,950 MT, -5.4 percent; Japan,35,121 MT, -3.4 percent; and Switzerland, 22,478 MT, +8.3 percent.

EASTERN OVERVIEW:

Belarus has maintained a strong dairy export pattern to Russia in recent years. While Russia remains a significant export destination for most dairy exports, China is rising, at least as to whey powder. Total January – April 2020 whey powder exports from Belarus, 45,000 MT,increased 78 percent YTD according to CLAL data made available to USDA. While Russia still leads as a Belarusian whey export destination with 19,001 MT, up 74 percent, China is up 258 percent with 14,968 MT. Russia remains the dominant export destination for butter,cheese, SMP and WMP. Total January – April 2020 YTD exports from Belarus to all destinations yielded the following percentage changes, butter, -2.3 percent; cheese, +9.5 percent; WMP,-19.4 percent; and SMP, -17.1 percent.

 Information for the period June 8 - 19, 2020, issued biweekly

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

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