EU-28 Milk Production Update – Dec ’15
According to Eurostat, Oct ’15 EU-28 milk production increased YOY for the seventh consecutive month, finishing 4.7% above the previous year and setting a new production record for the month of October. The YOY gain in production was the largest experienced in the past 12 months. The recent 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 six months leading up to the quota expiration as over-quota producers attempted to limit superlevy penalties for exceeding milk production quota levels. YOY increases in production were led by Ireland (+117,040), followed by the Netherlands (+115,700 MT) and Germany (+84,350 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 Oct ’15. YOY increases in production on a percentage basis were led by Ireland (+26.7%), Luxembourg (+13.6%) and the Netherlands (+11.4%). All ten of the top milk producing Member States experienced YOY gains in milk production during Oct ’15, increasing by a weighted average of 5.5% YOY. The top ten EU-28 milk producing Member States accounted for over 85% of the total EU-28 milk production throughout the month. EU-28 production growth remained strong throughout the first three quarters of 2014 due to high milk prices, favorable weather, expanding dairy herds and more than adequate feed and forage supplies however lower farmgate milk prices, the Russian ban on EU dairy exports, and the likelihood of superlevy penalties resulted in decelerating milk production during the months leading up to quota expiration. EU-28 milk production growth decelerated from Sep ’14 – Mar ’15 but has rebounded over more recent months. Culling rates increased in Europe as many producers culled their lower producing cows in the final months leading up to the quota expiration, however the recent uptick in culling may be short lived in the post-quota environment. According to the USDA EU-28 Livestock and Products Annual report, beginning 2016 dairy cow stocks are estimated at 23.55 million head, down just 0.2% from the 2015 figures. Sep ’15 EU-28 beef & dairy cow slaughter remained higher on a YOY basis for the fourth consecutive month, finishing up 1.8% YOY however total beef & dairy cow slaughter is up just 1.6% YOY through the first half of the ’15-’16 production season.