Report 33 – Released on August 13, 2020

WESTERN OVERVIEW:

Dairy plant managers in Germany report that milk production as July ended was estimated to be a couple of percent higher than a year ago. The seasonal decline is said to be about one half less than the previous week of 2020. News from France is similar. Plant managers the re report a bit above 2 percent more milk than at the end of July last year. This week a heatwave has moved into Northern Europe, including Germany and France. Germany recorded high temperatures of 95 fahrenheit. France was in the low 90’s. The heat is expected to ease, but may hasten the seasonal decline. Across manufactured dairy products, declining milk production is facing increasing consumer demand, especially as many people returned from long July holidays. That has tightened spot cream prices.While still awaiting official June dairy data for the non-United Kingdom part of Western Europe, data from the UK has been released. YTD milk production is down 0.6 percent from the same period of 2019 according to Eucolait citing Eurostat data. June 2020 milk production is up 0.1 percent from June 2019. Cheese and WMP show as the emphasis for production increases. June 2020 YOY cheese production is 4.3 percent higher than June 2019.

YTD through June 2020 cheese production leads the same period of 2019 by 0.9 percent. June 2020 YOY WMP production is 5.6 percent higher than June 2019. YTD through June 2020 WMP production leads the same period of 2019 by 4.5 percent. Through June 2020, butter production declined 1.5 percent from January – June 2019 and SMP production declined 16 percent. Formal talks between the EU and United Kingdom as to post Brexit trade matters are in recess until later in August. Historically, a significant amount of UK cheese and WMP production have gone to EU customers.

Cheese demand is called stable with continuing orders. Aging stocks remain a bit low, but manufacturers say at adequate levels. Behind the scenes is the cheese that entered the Private Storage Assistance (PSA) program which closed June 30, 2020. The cheese storage period was a minimum 60 days and maximum 180 days. That cheese, when it is able to taken from storage, or required to be removed, will be able to be sold.

A new free trade agreement between the EU and Vietnam became effective August 1. Goods in transit on August 1 are also covered. For dairy, after a maximum of 5 years, all tariffs on goods shipped from the EU to Vietnam will be eliminated. Some tariffs will be eliminated sooner.

EASTERN OVERVIEW:

Cheese exports from Belarus January – June 2020 were 10.1 percent higher than the same period of 2019 according to CLAL data made available to USDA. Russia received the majority of cheese exports. Whey exports January – June 2020 were 44.4 percent higher than the same period of 2019. Russia and China are the leading destinations for whey exports.

 Information for the period August 3 - 14, 2020, issued biweekly

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

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