Report 51 – Released on December 22, 2021

WESTERN EUROPEAN OVERVIEW:

Milk production in some of the leading Western European milk producing countries has beenlimping along for most of 2021, with disappointing results. Some German dairy analystsbelieve that final 2021 milk production data will show that German milk production fell forthe first time since 2017. French dairy processors are also disappointed with how 2021seems to be ending.

A curious aspect to this is that higher producer milk pay prices in Germany still yieldedless milk. Various factors came into focus. Forage growth was decent, but the qualitydeclined. Variable costs for energy and fertilizer increased. EU leaders are working togenerate formal efforts within member countries to reduce use of fertilizer, which wouldlikely reduce milk production. Insiders suggest there have already been market impacts.Fertilizer prices in Germany and France are up enough this year to be widely discussed. Thehigher prices have led to less fertilizer use this year. That is a factor already havingreduced milk production in the view of many dairy people based in Western Europe.

Structural changes are also noted. During the year the number of dairy cows declined, as didthe number of barns. The number of small herds, and cows in small herds declined more thanlarger herds. But even larger herds on average reflected a decline in cows.

Cheese remains a bright spot for Western Europe. Sources say this is true for production,sales, and consumption. It is expected that 2021 will set a cheese production record, evenas milk production is disappointing. Many cheese plant managers aim to top 2021 cheeseproduction in 2022.

EASTERN EUROPEAN OVERVIEW:

This week a European dairy association reported that Belarus is taking steps to ban someagricultural imports from the European Union, Norway, the U.S., and some other countries forsix months effective January 1, 2022. This is said to be in response to sanctions. Theseven-page announcement in Russian was said by the association to include some dairyproducts. More details are forthcoming.