EU-28 Milk Production Update – Mar ’16
Executive Summary EU-28 milk production figures provided by Eurostat were recently updated with values spanning through Jan ’16. Highlights from the updated report include: • EU-28 milk production growth continues to remain strong, finishing up 5.2% YOY in Jan ’16. The Jan ’16 YOY growth rate was the largest experienced in the past 18 months. • YOY production gains continue to be led by the Netherlands, followed by Germany and Poland. Luxembourg led all Member States in production gains on a percentage basis, finishing up 19.7%. • Milk production continues to remain strong despite EU-28 bovine slaughter finishing higher on a YOY basis for the sixth time in the past seven months, increasing by 1.3% YOY during Dec ’15. Additional Report Details According to Eurostat, Jan ’16 EU-28 milk production increased YOY for the ninth consecutive month, finishing 5.2% above the previous year and setting a new production record for the month of January. The recent YOY increases in production have corresponded with the expiration of the EU-28 milk production quota system at the end of Mar ’15. Monthly production growth had decelerated throughout the final months of the ’14-’15 production season as over-quota producers attempted to limit superlevy penalties for exceeding milk production quota levels. EU-28 milk production growth decelerated from Sep ’14 – Mar ’15 but has rebounded throughout the ’15-’16 production season in the post-quota environment. The Jan ’16 YOY growth rate of 5.2% was the largest experienced in the past 18 months. YOY increases in production continue to be led by the Netherlands (+163,300 MT), followed by Germany (+146,390 MT) and Poland (+67,280 MT). The aforementioned countries accounted for over a third of the total monthly EU-28 milk production and over half of the YOY production gains during Jan ’16. YOY increases in production on a percentage basis were led by Luxembourg (+19.7%), followed by Ireland (+19.5%) the Belgium (+17.2%). All ten of the top milk producing Member States experienced YOY gains in milk production during Jan ’16, increasing by a weighted average of 5.6% YOY. The top ten EU-28 milk producing Member States accounted for over 85% of the total EU-28 milk production throughout the month. Ireland remained outside of the top ten milk producing Member States during Jan ’16 as milk production reached what is typically seasonally low output levels. The seasonality component of Ireland milk production is larger than the combined seasonal components of the four next largest EU-28 Member States (Lithuania, Romania, Latvia and Bulgaria), historically. EU-28 culling rates have increased on a YOY basis in six of the past seven months as the current low margin environment has encouraged producers to cull their lowest producing cows. Dec ’15 EU-28 beef & dairy cow slaughter declined 3.1% MOM on a daily average basis but remained 1.3% higher YOY, finishing at a four year high for the month of December. YOY increases in beef & dairy cow slaughter were led by Poland, followed by the United Kingdom and Italy. USDA expects the EU-28 dairy cow herd to be marginally lower heading into 2016 but recent culling is expected to have a positive impact on future per cow productivity as lower producing animals are culled. Total EU-28 beef & dairy cow slaughter is up 1.4% YOY throughout the first three quarters of the ’15-’16 production season. EU-28 bovine slaughter rates increased sharply prior to quota expiration, finishing up 9.9% YOY in Mar ‘15 as producers attempted to limit superlevy penalties. The Dec ’15 YOY increase in bovine slaughter of 1.3% was consistent with the ’15-’16 YTD increase.