Learn how the recent spike in European milk output affects dairy farmers. What can you do to stay ahead in this changing market? Find out more.
Summary: European milk production surged in June, marking the fifth straight month of growth. Despite strong performances in France, Poland, and Italy, declines in the Netherlands and Ireland balanced these gains. Globally, major dairy exporters saw an overall drop for the 11th consecutive month due to setbacks in Argentina, the U.S., and New Zealand. June’s output hit 12.7 million metric tons or 28 billion pounds, the highest year-on-year growth since May 2023. Germany maintained steady production, while France saw a 2.9% rise. Poland and Italy grew, but the Netherlands and Ireland faltered. High temperatures and an outbreak of blue tongue disease have recently stifled Western European production. These issues and a tight U.S. milk supply have driven dairy product prices up. For businesses, this means adjusting to potentially lower global milk prices, which could reduce feed costs and milk prices. Higher output could open up new collaborations and markets, with increased demand in Asia and the Middle East.
Europe’s milk output rose for the fifth month, hitting 12.7 million metric tons in June.
France, Poland, and Italy saw significant gains, while Germany’s production remained steady.
Declines in the Netherlands and Ireland tempered these gains.
Global dairy exporters faced an 11th consecutive month of overall production drop despite European growth.
High temperatures and blue tongue disease have recently impacted Western Europe’s milk production.
U.S. dairy markets experienced increased prices due to tight milk supply and European solid performance.
Dairy farmers must adjust strategies for future price fluctuations and global supply issues.
Milk production is surprisingly increasing throughout Europe, breaking traditional seasonal tendencies. But what does this imply for your farm and the more significant dairy industry? Despite a wet spring, the EU saw a substantial rise in milk production in June. Changing weather, disease outbreaks, and evolving market dynamics all impact milk production. The USDA’s Dairy Market News notes that “hot weather in France, Germany, and the Netherlands has stifled milk production and component levels.” Additionally, blue tongue illness influences the Western European milk supply. Despite a constrained milk supply, the US dairy market is growing, and there is a balance between European growth and setbacks in other key dairy exporters, such as Argentina and the United States. Understanding these trends is critical for any dairy farmer who wants to remain ahead of the curve. Ready to delve further into this developing story? Let’s get started.
June’s Record-Breaking Numbers
In June, European milk collections totaled approximately 12.7 million metric tons or roughly 28 billion pounds. That is a 0.9% gain over the previous year, the most substantial year-on-year growth since May 2023. This spike comes after a slow spring, marking a significant milestone for the EU-27 dairy industry.
Country
June 2023 (Metric Tons)
June 2024 (Metric Tons)
Change (%)
Germany
3,100,000
3,100,000
0.0%
France
2,650,000
2,725,850
2.9%
Poland
1,100,000
1,115,000
1.4%
Italy
950,000
980,000
3.2%
Netherlands
1,670,000
1,655,300
-0.9%
Ireland
1,230,000
1,215,000
-1.2%
Others
2,900,000
2,910,000
0.3%
Country-Specific Insights
Germany, the world’s largest milk producer, kept production consistent with the previous year. Meanwhile, France, the second-largest manufacturer, had a significant 2.9% rise. Poland and Italy also recorded substantial growth, offsetting falls in the Netherlands and Ireland. These country-specific patterns are critical to understanding the overall market dynamics.
Strategic Insights for Adapting to European Milk Output Changes
Have you considered how the increase in European milk production may affect your day-to-day operations? The rise presents possibilities and problems you cannot afford to ignore.
An increase in European output may put downward pressure on global milk prices. While this may imply reduced feed and input costs for your business, it may also lower milk prices. Keeping an eye on market developments will be essential.
The increase in output may open the path for new collaborations and international markets. Look beyond your boundaries; high-quality dairy products are becoming more popular in Asia and the Middle East. So, what will be your strategy? Adapt, innovate, and grasp opportunities while facing difficulties front-on.
While Europe saw growth, other major dairy exporters encountered difficulty. Argentina and the United States had considerable setbacks, while New Zealand saw a modest year-over-year decline. The five top dairy exporters fell 0.1% from last year’s output, marking the 11th straight monthly fall. This global perspective is vital for understanding the larger picture.
Weather and Disease: The Double Whammy
Since June, increasing temperatures have caused a decline in milk production on both sides of the Atlantic. According to the USDA’s Dairy Market News, hot weather in France, Germany, and the Netherlands has reduced milk output and component levels. An epidemic of blue tongue disease has also affected productivity in Western Europe. These causes are reducing dairy product inventories and raising prices.
The Bottom Line
So, what are the takeaways from all of this? The increase in European milk output and worldwide production constraints have resulted in a dynamic and potentially profitable market. Monitor weather patterns and disease outbreaks, which may immediately influence supply and pricing. Be aware and agile to capitalize on market trends. What tactics will you use to navigate these changes? It might be critical to your dairy farm’s survival.
Discover why U.S. fluid milk sales and cheese exports are surging despite a decline in production. How is this shift impacting the dairy market? Read more to find out.
Unexpectedly for the U.S. dairy business, fluid milk sales and cheese exports are rising even as milk output steadily declines. Adjusting for the leap year, fluid milk sales jumped by about 100 million pounds in the first four months of the year over the previous year. Cheese exports concurrently reach a record 8.7 percent of total output from February to April, the most ever for any three months or even one month. These unexpected patterns can be attributed to a variety of factors, including changing consumer preferences, global market dynamics, and technological advancements in dairy production. The wider consequences for the dairy industry, such as shifts in market share and potential economic impacts, are also investigated in this paper.
Despite the challenges of falling milk output, the U.S. dairy industry is demonstrating remarkable resilience with the rise in fluid milk and cheese exports. This unexpected trend holds promising implications for producers and consumers, instilling a sense of hope and optimism in the industry.
As the dairy industry negotiates these changes, fast rises in cheese prices have significantly raised the Class III price, underlining the market’s reaction. Examine the elements underlying these patterns and the possible long-term effects on domestic consumption and foreign commerce.
With a roughly 100 million pound gain and a 0.7 percent leap year-adjusted surge, this unprecedented spike in fluid milk sales highlights a dramatic change in consumer behavior. Rising health awareness and the availability of dairy substitutes have usually been causing fluid milk intake to drop. But this increase might point to changing market dynamics or fresh enthusiasm for milk’s nutritious value.
Dairy Product
Change in Consumption (Percentage)
Fluid Milk
+0.7%
American Cheese
-1.2%
Yogurt
+2.4%
Non-American Cheeses
+1.5%
Butter
-0.8%
Ice Cream
-1.0%
The changes in domestic dairy consumption create a complicated scene for the American dairy business. While butter, ice cream, and American cheese consumption have dropped, fluid milk sales may have increased due to changing habits or knowledge of nutritional value. Growing worries about health, animal welfare, and environmental damage define this downturn.
On the other hand, demand for yogurt and non-American cheeses has surged. Yogurt’s probiotics and health advantages attract health-conscious customers. Non-American cheeses benefit from their superior quality, appeal to refined tastes, and clean-label tendencies.
This difference draws attention to shifting customer demands and the need for dairy farmers to adjust. Stakeholders trying to seize market possibilities in a dynamic economic environment must first understand these trends.
American Cheese Exports Set New Record: A Game-Changer for the U.S. Dairy Market
The U.S. dairy market has witnessed a notable shift in export trends over the past year, which can largely be attributed to evolving global demand and intensified trade relations. Cheese exports, in particular, have set new benchmarks, reflecting both opportunities and challenges in the international marketplace. Below is a detailed table outlining the changes in cheese exports over the past year:
Month
Cheese Exports (Million Pounds)
Year-over-Year Change (%)
January 2023
60
5.2%
February 2023
58
4.9%
March 2023
65
7.5%
April 2023
70
9.8%
May 2023
72
11.1%
June 2023
68
8.3%
July 2023
75
10.7%
August 2023
80
12.5%
September 2023
78
11.4%
October 2023
82
13.2%
November 2023
85
14.1%
December 2023
88
15.3%
Key Export Markets: Japan, Mexico, South Korea
Emerging Opportunities: Southeast Asia, Middle East
With 8.7% of total output moving abroad, the United States saw an increase in cheese exports between February and April. This fantastic number emphasizes the increasing worldwide market for American cheese. The milestone points to a change in the strategic emphasis of the U.S. dairy sector as producers show their capacity to meet and surpass the demands of foreign markets, therefore implying a future in which exports will be more important economically.
Milk Production Plunge: Unpacking the Multifaceted Decline in the U.S. Dairy Sector
In examining the shifting landscape of the U.S. dairy market, it’s imperative to consider the nuances in milk productiontrends that have unfolded over the past year. These trends highlight the recent downturn in production and provide a lens through which we can better understand the broader dynamics at play.
Month
Milk Production (billion pounds)
% Change (Year-over-Year)
April 2022
18.1
-0.4%
March 2022
17.9
-0.5%
February 2022
16.0
-0.6%
January 2022
17.5
-0.7%
December 2021
17.7
-0.8%
November 2021
16.8
-0.9%
October 2021
16.9
-1.0%
September 2021
16.0
-1.1%
August 2021
18.0
-1.2%
July 2021
18.2
-1.3%
June 2021
17.8
-1.4%
May 2021
18.1
-1.5%
Adjusting for the leap year, the continuous reduction in U.S. milk production—0.4 percent in April—has lasted 10 months. For the dairy sector, this development begs serious questions.
Many factors are driving this slump. First, dairy farmers have been under pressure from changing consumer tastes that influence demand. Growing demand for plant-based and dairy substitutes is reshaping the market share controlled initially by cow’s milk. Furthermore, changing customer behavior and ethical and environmental issues influence production levels.
The low cow count raises yet another critical question. Modern and conventional dairy states have battled dwindling or stagnating cow numbers. Growth patterns in cow counts have slowed dramatically in contemporary dairy states since 2008; some years even show reductions. This has lowered milk availability, together with a volatile macroeconomic backdrop.
Dairy farmers also face many operational difficulties, such as supply chain interruptions, personnel shortages, and the need for fresh technologies. These problems tax the industry’s ability to sustain past output levels even as manufacturers seek creative ideas.
Dealing with these entwined problems would help to stop the drop in output and guarantee the resilience and sustainability of the American dairy market against changing consumer tastes and financial uncertainty.
Turbulent Trends: How Consumer Values and Supply Chain Challenges Propelled Cheese Prices Skyward
The past year has witnessed significant fluctuations in the dairy market, with particular emphasis on cheese prices, which have experienced rapid increases. This section breaks down the price trends over the past year to provide a comprehensive understanding of the market dynamics.
Month
Class III Milk Price (per cwt)
Cheese Price (per lb)
Butter Price (per lb)
May 2022
$25.21
$2.29
$2.68
June 2022
$24.33
$2.21
$2.65
July 2022
$22.52
$2.00
$2.61
August 2022
$20.10
$1.95
$2.50
September 2022
$21.86
$2.10
$2.55
October 2022
$21.15
$2.03
$2.53
November 2022
$20.72
$2.01
$2.60
December 2022
$21.55
$2.05
$2.58
January 2023
$20.25
$1.98
$2.55
February 2023
$18.67
$1.85
$2.50
March 2023
$19.97
$1.92
$2.55
April 2023
$20.25
$2.01
$2.52
May 2023
$23.30
$2.35
$2.70
Many complex elements reflecting more significant market dynamics drove the increase in cheese prices throughout May. The dairy sector has seen a paradigm change as consumer tastes center on health, environmental issues, and animal welfare more and more. These higher ethical standards call for more rigorous behavior, which drives manufacturing costs. A turbulent macroeconomic climate, ongoing supply chain interruptions, and workforce difficulties further limit cheese supplies. Cheese prices skyrocketed as demand for premium dairy products continued locally and abroad, and supply ran low.
The May Class III price, which rose by $3.05/cwt from the previous month, was substantially affected by this price increase. Primarily representing the worth of milk used for cheese manufacture, the Class III price is a benchmark for the larger dairy market. This sharp rise emphasizes how sensitive commodity prices are to quick changes in specific sectors, stressing the cheese market’s importance in the national dairy economy. Dairy farmers must balance growing expenses with remaining profitable while meeting changing customer expectations.
The Bottom Line
The surprising surge in fluid milk sales and record-breaking cheese exports within the changing terrain of the U.S. dairy industry contrasts sharply with the continuous drop in milk output. The 0.7 percent rise in milk sales points to a change in consumer behavior, motivated by a fresh enthusiasm for classic dairy products. On the other hand, American cheese’s demand internationally has skyrocketed; 8.7% of output is exported, suggesting great worldwide demand and a possible new income source for home producers.
Adjusting for the leap year, the consistently declining milk output—now at ten straight months of year-over-year decline—showcases important production sector issues probably related to feed price volatility and long-term changes in dairy farming techniques. Reflecting these supply restrictions and shifting market dynamics, the substantial rise in cheese prices fuels a significant increase in the May Class III price.
These entwined tendencies point to both possibilities and challenges for American dairy farmers, implying a tricky balancing act between satisfying home demand, profiting from foreign markets, and negotiating manufacturing efficiency and cost control.
Key Takeaways:
In an evolving landscape marked by shifting consumer preferences and unprecedented export achievements, the U.S. dairy market has experienced stark contrasts in its fluid milk sales, cheese exports, and milk production. Below are the key takeaways from these recent developments:
U.S. fluid milk sales rose by nearly 100 million pounds, or 0.7% on a leap year-adjusted basis, during the first four months of this year.
While domestic consumption of most major dairy products decreased, yogurt and non-American types of cheese saw increased domestic demand.
A record 8.7% of total U.S. cheese production was exported between February and April, marking an all-time high for this period.
April 2023 witnessed a 0.4% decline in U.S. milk production compared to April 2022, continuing a ten-month trend of lower year-on-year production figures.
Cheese prices surged in May, driving the May Class III price up by $3.05 per hundredweight from the previous month.
Summary:
The U.S. dairy industry has experienced a significant increase in fluid milk sales and cheese exports, despite declining milk output. Fluid milk sales jumped by about 100 million pounds in the first four months of the year, while cheese exports reached a record 8.7% of total output from February to April. This unexpected trend can be attributed to changing consumer preferences, global market dynamics, and technological advancements in dairy production. The wider consequences for the dairy industry include shifts in market share and potential economic impacts. Despite these challenges, the U.S. dairy industry is demonstrating remarkable resilience with the rise in fluid milk and cheese exports. This trend holds promising implications for producers and consumers, instilling a sense of hope and optimism in the industry. However, as the dairy industry negotiates these changes, fast rises in cheese prices have significantly raised the Class III price, underlining the market’s reaction. American cheese exports set a new record for the U.S. dairy market, reflecting both opportunities and challenges in the international marketplace. Addressing these entwined problems would help prevent the drop in output and guarantee the resilience and sustainability of the American dairy market against changing consumer tastes and financial uncertainty.
Learn More:
For further insights into this evolving landscape, consider exploring the following articles:
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.