EU-28 Milk Production Update – Apr ’16
Executive Summary EU-28 milk production figures provided by Eurostat were recently updated with values spanning through Feb ’16. Highlights from the updated report include: • EU-28 milk production growth continues to remain strong, finishing up 5.5% YOY in Feb ’16. The Feb ’16 YOY growth rate was the largest experienced in the past 17 months. • YOY production gains continue to be led by the Netherlands, followed by Germany, Ireland and Poland. Ireland led all Member States in production gains on a percentage basis, finishing up 32.3%. • Despite the current low-margin environment, Jan ’16 EU-28 slaughter rates declined to a new record low for the month of January, finishing down 3.4% YOY. Additional Report Details According to Eurostat, Feb ’16 EU-28 milk production increased YOY for the 11th consecutive month, finishing 5.2% above the previous year when adjusting for leap year and assuming flat YOY growth throughout Spain. Feb ’16 production levels were the largest on record for the month of February. 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 Feb ’16 YOY growth rate of 5.5% was the largest experienced in the past 17 months. YOY increases in production continue to be led by the Netherlands (+167,255 MT), followed by Germany (+154,547 MT), Ireland (+71,554 MT) and Poland (+69,371 MT). The aforementioned countries accounted for over 40% of the total monthly EU-28 milk production and over half of the YOY production gains during Feb ’16. YOY increases in production on a percentage basis were led by Ireland (+32.3%), followed by Cyprus (+24.9%) and Luxembourg (+22.7%). All ten of the top milk producing Member States with the exception of France experienced YOY gains in milk production during Feb ’16, increasing by a weighted average of 6.2% YOY. The top ten EU-28 milk producing Member States accounted for over 85% of the total EU-28 milk production throughout the month. Despite the current low-margin environment, Jan ’16 EU-28 slaughter rates declined to a new record low for the month of January. Jan ’16 EU-28 beef & dairy cow slaughter finished 7.6% lower MOM on a daily average basis while also declining 3.4% YOY. YOY declines in beef & dairy cow slaughter were led by Germany, followed by France, the United Kingdom and the Netherlands. Despite the YOY decline, total EU-28 beef & dairy cow slaughter remains up 1.0% YOY throughout the first ten months of the ’15-’16 production season. 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. 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. Bovine slaughter finished higher on a YOY basis over six of the nine post-quota months prior to Jan ’16, however the Jan ’16 YOY decline in bovine slaughter of 3.4% was only slightly less than the largest YOY decline of the production season experienced during Oct ’15.