EU milk production showing signs of recovery

Published 23 August 17

EU milk production in June increased 1.8% compared to the previous year, the fouth consecutive month of year-on-year increases. 

23.08.17 EU milk production 1

Currently demand for milk is high so, for those wanting to produce more to take advantage of high prices, milk production continuing to out-perform last year will be welcome. However, when viewed on a 12-month rolling total, milk production is still recovering from the lulls through 2016 and into 2017. 

23.08.17 EU milk production 2

The key question is how much the current volume levels will impact on buyers’ plans. A continued recovery, combined with high prices for most products, could mean buyers will attempt to keep their own stocks down and hope for a drop in prices going forward. However, given the latest official production figures for the EU are now two months out of date, any impact from relatively high milk production should already be showing in the markets. At present it does not appear to be enough to dampen prices, and if buyers’ aim to keep stocks tight they might only succeed in pushing prices even higher when they eventually come back into the market to re-stock.