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EU Dairy Decline: 2024 Milk Production Forecasted to Drop 0.3% Amid Lower Cow Numbers and Rising Costs

Discover why EU milk production is forecasted to drop 0.3% in 2024. How will declining cow numbers and rising costs impact the dairy industry? Read more to find out.

EU Flag waving against blue Sky

European Union milk production is set to face another challenging year, continuing its downward trend into 2024. Several factors contribute to this decline, with a predicted 0.3% drop in cow milk production. As the number of dairy cows falls below 20 million for the first time, it’s evident that consistent growth in cow productivity won’t fully offset the shrinking cow inventories. Rising production costs and lower farm-gate milk prices further exacerbate the situation, making milk production less profitable for EU farmers.  Join us as we delve further; these elements paint a comprehensive picture of the EU’s milk production landscape in 2024.

EU Dairy Herds Dwindling: First-Ever Drop Below 20 Million Cows Marks 2024’s Start

CountryDairy Cows in Milk (January 2024)Expected Change in Dairy Farmer Numbers (2024)Milk Production (Forecast for 2024)
Germany4.0 millionDecreaseStable
France3.5 millionDecreaseSlight Decrease
Poland2.8 millionDecreaseSlight Increase
Belgium0.6 millionDecreaseSlight Decrease
Netherlands1.6 millionMinimal ChangeStable
Ireland1.5 millionMinimal ChangeDecrease

At the start of 2024, the EU saw a significant change in its dairy industry: dairy cows dropped below 20 million, hitting 19.7 million. This marks a historic low and indicates a continuing downward trend in cow numbers, which is expected to persist throughout the year.

The Double-Edged Sword of Rising Cow Productivity Amid Shrinking Herds

Even though each cow produces more milk, more is needed to make up for the overall decline in cow numbers across the EU. Simply put, fewer cows mean less milk overall. This imbalance contributes directly to the forecasted 0.3% drop in milk production for 2024. Despite individual productivity gains, the milk output is declining due to the shrinking herds.

A Temporary Respite: Early 2024 Sees Milk Deliveries Surge Before Expected Decline

Time PeriodMilk Deliveries (MMT)Change (% Year-on-Year)Average Farm Gate Milk Price (EUR/100kg)

January-February 2023 24.0 – 40.86

January-February 2024 24.4 1.7% 35.76

Full Year 2023 145.24 -0.03% 39.50

Full Year 2024 (Forecast) 144.8 -0.3% 37.00

Early 2024 saw a 1.7% rise in cow’s milk deliveries compared to the same period in 2023. However, this boost is short-lived. Many farmers are expected to sell their cows or exit milk production later in the year, leading to a decline in deliveries.

The Multifaceted Challenges Shaping Europe’s Dairy Economy

The economic landscape for dairy farmers is becoming more challenging. A key issue is the steady drop in farm-gate milk prices since early 2023, significantly affecting profitability. 

Production CostsHigh production costs for energy, fertilizers, and labor persist, squeezing farmers’ margins despite some recent reductions. 

Geographical Impact: In Germany, France, Poland, and Belgium, smaller and less efficient farms are hardest hit. The pressure from lower milk prices and high input costs drives many to reduce herd sizes or stop milk production. 

Environmental RegulationsEnvironmental rules in the Netherlands and Ireland seek to cut nitrogen emissions, which are expected to negatively affect herd numbers and production costs in the long term. 

Overall, larger farms may better cope, but the trend toward consolidation continues due to falling profits and rising costs.

Environmental Regulations Cast Long Shadows Over EU Dairy Farming

Environmental regulations are threatening Europe’s dairy farming. New measures to curb nitrogen emissions are adding pressure on struggling farmers in the Netherlands and Ireland. 

For example, the Netherlands aims to cut nitrogen emissions by 50% by 2030, including reducing the number of dairy cows and relocating farms. Ireland’s targets similarly demand stricter manure management and sustainable farming practices, both costly and complex. 

These regulations, combined with high production costs and declining milk prices, make it challenging for smaller farms to stay in business. Many are choosing to exit the market rather than invest in expensive upgrades. 

As a result, smaller farms are shutting down, and larger farms need help to maintain their herd sizes. Although these regulations are essential for a greener future, they add another layer of complexity to the EU dairy industry’s challenges.

Generation Renewal Crisis Accelerates Market Consolidation in EU Dairy Sector

A growing trend in market consolidation and farm closures is evident within the EU dairy sector. One key issue here is the challenge of generation renewal. Younger generations are increasingly hesitant to continue milk production due to the heavy workload and tight profit margins. Elevated production costs and decreasing farm-gate milk prices also make it challenging for smaller, less efficient farms to stay in business. 

However, larger and more professional farms show notable resilience. They often have better infrastructure, access to advanced technology, and excellent financial stability, allowing them to maintain herd numbers despite broader declines. By leveraging economies of scale and more efficient practices, these farms can better absorb economic shocks and comply with environmental regulations. 

This disparity between small and large farms is accelerating market consolidation. As smaller farms exit, larger ones are absorbing their market share. While the total number of dairy farms is decreasing, those that remain are becoming more advanced and better equipped to tackle future challenges in the dairy economy.

Record-High Milk Prices in 2022 Spark Production Surge, Only to Shatter in 2023-2024

The surge in milk deliveries in 2022 and 2023 stemmed from record-high EU farm gate milk prices in 2022, peaking in December. These prices incentivized farmers to boost production despite rising costs, supporting the dairy industry at that time. 

However, these prices began to fall from May 2023 through March 2024, squeezing farmers financially. Although still above the 5-year average, the decline sharply contrasted with 2022’s profitability. With global milk production up and dairy demand fluctuating, EU farmers adjusted their production levels, paving the way for a predicted drop in milk deliveries in 2024.

The Ripple Effect: How Global Market Dynamics Shape EU Milk Prices 

Global market dynamics significantly impact EU milk prices. The world’s largest dairy exporters, including Australia, the United States, the UK, and New Zealand, have increased production, leading to an oversupply that pressures prices downward. This makes it challenging for EU producers to maintain their margins. 

Simultaneously, demand from major importers like China and some Middle Eastern countries is declining. Various factors, including trade tensions and shifting consumer preferences, contribute to this weaker demand. 

This supply-demand imbalance has reduced farm gate milk prices in the EU. While European prices remain higher than those of international competitors, more than this advantage is needed to counteract the rising production costs and reduce global demand. The EU dairy industry must navigate these challenges to stay competitive and sustainable.

Price Disparities in Global Dairy: EU’s Costly Position Against New Zealand and US Competitors

When you look at milk prices, you’ll notice that the EU’s are much higher than those of other major exporters like New Zealand and the US. In February 2024, the EU’s milk price hit EUR 46.42 per 100 kilograms. That’s 27% more than New Zealand’s and 18% more than the US. 

These higher prices mean EU dairy products cost more to produce and sell, making it challenging for EU producers to compete globally. Higher costs can squeeze farmers further, especially with high input costs and changing demand.

Weather Woes: Uneven Conditions Across Europe Impact Dairy Farming

In 2024, weather was vital in shaping feed and pasture conditions across Europe. Spring brought warm temperatures and balanced rainfall, leading to good green feed availability. However, the northwest, especially Ireland, faced challenges. Ireland’s dairy farming, which relies on cattle grazing for up to nine months, has struggled with wet soils and recent rains. These conditions hindered field access and grassland regrowth, severely impacting milk production.

The Bottom Line

In summary, EU milk deliveries are forecast to dip to 144.8 million metric tons (MMT) in 2024. Unfavorable weather and high input costs for energy and fertilizers are straining farmer margins. Despite brief boosts in productivity, these challenges will likely persist throughout the year.

Key Takeaways:

  • Decline in Cow Numbers: Cow numbers fell below 20 million for the first time in early 2024, indicating a continuing downward trend.
  • Productivity vs. Herd Size: Increased productivity per cow is not enough to counterbalance the overall decrease in herd sizes.
  • Initial Surge in Milk Deliveries: Early 2024 saw a 1.7% increase in milk deliveries, but this is expected to decline as more farmers exit the industry.
  • Decreasing Profitability: Farm-gate milk prices have been falling since early 2023, alongside high production costs, squeezing farmers’ profit margins.
  • Impact of Environmental Regulations: Government plans to cut nitrogen emissions in countries like the Netherlands and Ireland are affecting herd numbers.
  • Market Consolidation: The industry is seeing greater consolidation, with smaller, less efficient farms closing and bigger farms maintaining their herd sizes.
  • Weather Complications: Varying weather conditions across Europe in 2024 have impacted green feed availability and pasture conditions, particularly in Ireland.

Summary: The European Union’s milk production is experiencing a significant decline, with a predicted 0.3% drop in cow milk production. This decline is attributed to rising production costs and lower farm-gate milk prices. The number of dairy cows has fallen below 20 million for the first time, making milk production less profitable for EU farmers. In early 2024, there was a 1.7% rise in cow milk deliveries compared to the same period in 2023, but this was short-lived as many farmers were expected to sell their cows or exit milk production later in the year. The economic landscape for dairy farmers is becoming more challenging, with a steady drop in farm-gate milk prices since early 2023 significantly affecting profitability. High production costs for energy, fertilizers, and labor persist, squeezing farmers’ margins despite some recent reductions. The EU dairy sector is experiencing a growing trend of market consolidation and farm closures, with younger generations increasingly hesitant to continue milk production due to heavy workloads and tight profit margins.

Declining Dutch Milk Supply Contrast with Growing European Production; Prices Slightly Down

Explore the reasons behind the decline in Dutch milk supplies as European production rises. What does this mean for milk prices and the future of dairy farmers? Continue reading to uncover the details.

The divergence in milk supply trends between the Netherlands and Europe is a significant development. In April, Dutch dairy farmers produced 1.4% less milk than last year, while Europe witnessed a 0.6% rise in March and a 1.2% increase in the first quarter of 2024. 

The contrasting milk supply trends in Poland and Ireland, with a 4% growth and a 6% decline respectively in March, underscore the regional variations that significantly impact the dairy industry.

Dutch farmers are grappling with challenges such as bluetongue and reduced derogation, resulting in a 57 million kg (1.2%) drop in the first four months of 2024. However, the growth in Belgium, Germany, and France is helping to offset these declines, demonstrating the resilience of the dairy industry in the face of adversity. These mixed trends paint a complex but hopeful picture of the dairy industry landscape across Europe.

Cloudy Skies Over Dutch Dairy: April 2024 Milk Deliveries Slump

PeriodMilk Supply (million kg)Change Compared to Previous Year
January 20241,320-1.5%
February 20241,100-1.0%
March 20241,400-0.9%
April 20241,350-1.4%

The latest data paints a sobering picture of the Dutch milk supply. In April 2024, dairy farmers in the Netherlands faced a 1.4 percent decrease in milk deliveries compared to last year. This decline is part of a broader trend, with the first four months of 2024 seeing a total reduction of 57 million kilograms of milk, or a 1.2 percent drop, compared to the same period in 2023. Such statistics underscore significant challenges facing the Dutch dairy sector.

Factors Influencing Dutch Milk Decline: Disease and Regulation Tightening

It’s crucial to understand the factors that have led to the decline in Dutch milk supply. The main contributors are the aftermath of bluetongue disease, which affects cattle, and the reduction of special permissions allowing farmers to exceed EU nitrogen limits. These tighter restrictions on nitrogen usage mean less intensive dairy farming practices. By understanding these factors, stakeholders can be better informed about the challenges Dutch dairy farmers are facing.

Europe’s Milk River Flows Stronger: March 2024 Sees Notable Increase in Deliveries 

CountryMilk Supply Growth in March 2024
Poland+4%
Belgium+0.6%
Germany+0.6%
France+0.6%
Ireland-6%

While Dutch dairy farmers are experiencing a decline, Europe as a whole is showing a different trend. In March 2024, milk deliveries across Europe increased by 0.6 percent. The first quarter of 2024 saw European dairy farmers delivering 1.2 percent more milk than in 2023. Regions like Belgium, Germany, and France showed modest increases, indicating a stable milk collection across the EU despite challenges in places like Ireland. These contrasting trends are significant and should be noted by all stakeholders in the dairy industry.

Spotlight on Individual Countries: Poland’s Surge and Ireland’s Woes

CountryTrendPercentage Change
PolandIncrease+4%
IrelandDecrease-6%
BelgiumIncrease+0.6%
GermanySlight Increase+0.3%
FranceIncrease+0.6%
NetherlandsDecrease-1.2%

Looking closer at individual countries, you’ll see some clear trends. Poland is the most vigorous climber in March, showing a solid 4% increase in milk supply. This boost is thanks to favorable weather and better dairy farming practices. On the flip side, Ireland saw a significant drop, with a 6% decrease in milk supply due to extreme wetness impacting pasture conditions.

April Showers Bring Price Lowers: Tracking European Milk Price

CountryApril 2024 Price (€ per 100 kg)March 2024 Price (€ per 100 kg)% Change
Netherlands44.1044.30-0.45%
Belgium43.8543.95-0.23%
Germany44.2044.35-0.34%
France43.7543.85-0.23%
Poland43.6043.70-0.23%
Ireland42.8043.30-1.15%

European milk prices dipped slightly in April. The average was 43.97 euros per 100 kg, down by 0.49 euros from March. This small drop mainly stems from seasonal factors and specific challenges, like the wet weather in Ireland, which impacted bonuses.

Weather Woes and Economic Ripples: Unpacking the April Dip in European Milk Prices

Several factors contributed to the slight drop in European milk prices in April. A key factor was the removal of bonuses by some Irish factories due to extreme wetness in Ireland, which disrupted farming conditions. Additionally, stabilizing milk collections across Europe and a 6% decrease in energy costs in Q1 2024 also played roles. These combined influences created a ripple effect, slightly nudging average milk prices downward.

The Bottom Line

The milk supply in 2024 shows a clear contrast. Dutch dairy farmers saw a 1.4% drop in April deliveries due to bluetongue and new regulations. In contrast, European dairy producers enjoyed a 1.2% increase in the first quarter. However, April’s European milk price fell slightly to 43.97 euros per 100 kg, influenced by the removal of seasonal bonuses in Ireland.

Discover why Dutch milk supply is declining while European production grows. How will this impact milk prices and dairy farmers? Read more to find out.

  • The Netherlands saw a 1.4% decline in milk deliveries in April 2024 compared to April 2023.
  • From January to April 2024, Dutch milk supply decreased by 57 million kg (-1.2%) compared to the same period in 2023.
  • The decline in the Netherlands has been linked to the aftermath of bluetongue disease and stricter regulations reducing derogation allowances.
  • Conversely, European countries overall experienced a 0.6% increase in milk supply in March 2024.
  • Poland recorded the highest growth at 4% in March 2024, while Ireland faced the steepest decline at 6%.
  • Average European milk prices decreased slightly in April 2024 to 43.97 euros per 100 kg of milk.
  • The price drop was partially due to the removal of bonuses in Irish factories, attributed to extreme wet weather conditions.

Summary: Milk supply trends in the Netherlands and Europe have shown significant differences. Dutch dairy farmers experienced a 1.4% decrease in milk deliveries in April 2024 compared to last year and a 1.2% drop in 2023. This decline is part of a broader trend, with the first four months of 2024 seeing a total reduction of 57 million kg of milk. Factors influencing this decline include the aftermath of bluetongue disease and the reduction of special permissions allowing farmers to exceed EU nitrogen limits. In March 2024, Europe’s milk river flowed stronger, with deliveries increasing by 0.6%. Belgium, Germany, and France showed modest increases, while Poland saw a 4% increase due to favorable weather and better dairy farming practices. European milk prices slightly dropped in April.

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