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Decline in Dutch Milk Supply Amid Rising EU Production and Stable European Milk Prices

Find out why Dutch milk supply is dropping while EU production is growing. What does this mean for European milk prices? Check out the latest trends and market changes.

As the Dutch dairy industry struggles with falling milk production, Europe faces a curious paradox: a ‘milk lake.’ This situation, where there is an excess milk supply, highlights the complex dynamics within the European dairy market and broader agricultural trends reshaping the industry. This article examines the contrasting developments in Dutch milk supply and rising milk production across the EU, as well as the ‘milk lake’ implications on market stability and pricing mechanisms.

While the Netherlands has seen a continuous decline in milk output due to factors like the bluetongue virus and regulatory changes, countries like Poland and Germany are witnessing growth. According to ZuivelNL, the EU milk supply has grown by 1.1 percent in the first four months of this year, whereas the Netherlands’ supply has dropped by 1.3 percent. These opposing trends raise questions about supply management, market stability, and pricing mechanisms within Europe’s dairy industry.

Unraveling the Drop: Biological Strains and Regulatory Chains Impact Dutch Milk Supply

MonthMilk Supply (million kg)Change from Previous Year (%)
January 20241,100-1.2%
February 20241,050-1.0%
March 20241,200-0.9%
April 20241,180-1.5%
May 20241,150-1.6%

The decline in the supply of Dutch milk stems from biological challenges and regulatory constraints. Last year, the bluetongue virus outbreak in autumn significantly impacted livestock health, reducing milk yield. This effect is evident in the 1.6% drop in May 2023 and a 1.3% average decrease over the first five months of 2024. 

Compounding these biological issues are regulatory changes, specifically the phase-out of derogation, which historically allowed farmers to use higher manure levels to boost production. With stricter nitrogen emission and manure management rules now in place, the number of dairy cows per farm is capped, further limiting milk output. 

In summary, combining the bluetongue virus and regulatory shifts, such as the end of derogation, has led to a notable reduction in Dutch milk production.

Diverse Trends in EU Milk Supply: Poland’s Surge Amid Ireland’s Struggles

CountryMilk Supply Change (April 2024)
Poland+5%
Germany+0.6%
France0%
Ireland-8%

The European Union’s milk supply has seen a notable rise, with a 0.6% increase in April and a 1.1% growth over the year’s first four months. Poland’s impressive 5% increase and Germany’s slight uptick have significantly boosted the EU’s overall supply. However, Ireland struggles with an 8% decline, and France’s growth has stagnated. These contrasts highlight the complexities within the European dairy market.

Stability Amid Complexity: European Milk Prices Buoyed by Sustainability Initiatives and Bonuses

CompanyPrice in May (€ per 100 kg)Change (€ per 100 kg)Sustainability Premium (€ per 100 kg)
Milcobel44.100.000.78
Laiterie des Ardennes (LDA)44.10+0.500.49
DMK Deutsches Milchkontor eG44.10+0.510.50
Hochwald eG44.100.000.80
Arla44.10+0.452.44
Capsa Food44.10+0.06
Valio44.100.00
Savencia44.10-0.09
Danone44.10-0.03
Lactalis44.10-0.18
Sodiaal44.100.000.29
Saputo Dairy UK44.10+0.05
Dairygold44.10+1.08
Tirlan44.10+0.150.50
Kerry Agribusiness44.10-0.190.10
FrieslandCampina44.10+0.471.21
Emmi44.10-0.62
Fonterra44.10+0.32
United States class III44.10-0.29

Since January, European milk prices have remained stable, around 44 euros per 100 kg. In May, the average was 44.10 euros per 100 kg, a slight increase of 0.07 euros from April. This steadiness is due to sustainability premiums and bonuses, including rewards for participating in sustainability programs, GMO-free milk, and other environmentally friendly practices. Such incentives buffer producers from market fluctuations and contribute to the stability of milk prices.

Global Dairy Dynamics: Diverging Trends Highlight the EU’s Stable Milk Supply Amid Global Volatility

CountryApril 2024 Milk Supply Change (%)January-April 2024 Milk Supply Change (%)
Poland+5.0+3.8
Germany+0.8+1.1
France0.0+0.5
Ireland-8.0-6.5
Netherlands-1.6-1.3

In the global dairy market, trends vary widely among significant exporters. Australia has recently shown resilience with a 3% growth. Conversely, the United States and New Zealand faced declines, with the US seeing a slight decrease and New Zealand a more significant 4% drop

The situation is more severe in South America. Argentina’s milk production shrank by 16%, and Uruguay’s fell by 7% in April, highlighting regional challenges. In contrast, the combined volume of significant dairy exporters, including the EU, saw a modest 0.3% increase (0.35 billion kg) up to April 2024. These trends illustrate the diverse fortunes and impacts in the global dairy market.

Market Dichotomy: Butter Price Volatility Versus Skimmed Milk Powder’s Competitive Pressures

ProductDatePrice (€/100 kg)
Butter3/7/24670
Butter29/5/24668
Butteravg. 2023476
Skimmed Milk Powder3/7/24241
Skimmed Milk Powder29/5/24248
Skimmed Milk Powderavg. 2023242

The European dairy market paints a nuanced picture of butter and skimmed milk powder pricesButter prices saw significant volatility in early 2024, rising sharply from mid-May to early June before stabilizing due to unexpectedly cool summer temperatures reducing cream demand. This stabilization has introduced uncertainty into the butter market. 

Conversely, skimmed milk powder prices have been relatively stable but face competitive pressures from cheaper US and Oceania imports. Demand unpredictability, especially in Asian markets, has also contributed to minor price decreases through June, highlighting ongoing challenges in the market.

The Bottom Line

The European market presents a mix of trends as the Dutch milk supply declines due to biological and regulatory challenges. However, the EU sees growth, driven by Poland, while Ireland faces declines. European milk prices, buoyed by sustainability premiums and bonuses, remain stable amid global volatility. Globally, the EU’s stability contrasts with declines in New Zealand and Argentina. These contrasting trends underscore the potential for growth and the need for innovation and collaboration within the global dairy sector. 

The dairy sector is currently grappling with biological strains, regulatory burdens, and economic challenges, all impacting profitability and market consolidation. Smaller farms are particularly at risk. In this context, strategic adaptive measures and support systems are crucial. It’s a call to action for policymakers, stakeholders, and farmers to unite, using sustainability initiatives to counter economic strains and ensure food security. The industry’s resilience is evident, but proactive regulation, sustainability, and financial support are essential. A combined effort is needed to enhance dairy farming. This analysis underscores the need for innovation and collaboration within the global dairy sector.

Key Takeaways:

  • The Dutch milk supply has continued its downward trend, recording a 1.6 percent decrease in May 2024 as compared to May 2023, attributed to the bluetongue virus and changes in derogation policies.
  • Despite the Dutch decline, the overall milk supply in the European Union increased by 1.1 percent over the first four months of 2024, driven by significant growth in Poland and slight increases in Germany, while Ireland’s output fell sharply.
  • European milk prices have shown remarkable stability, averaging around 44 euros per 100 kg since January 2024, buoyed by various sustainability surcharges and bonuses across different countries and companies.
  • Globally, major dairy exporters illustrated mixed trends, with Australia’s supply growing, while Argentina and New Zealand experienced substantial declines.
  • The Dutch dairy product market exhibited volatility, notably in butter prices, while skimmed milk powder prices faced competitive pressures from cheaper US and Oceania products, leading to slight decreases in June.

Summary:

The Dutch dairy industry is experiencing a’milk lake’ due to a decline in production due to the bluetongue virus outbreak and regulatory changes. The EU’s milk supply has increased, with Poland and Germany contributing to the overall supply. Ireland and France are struggling with declines. Sustainability premiums and bonuses contribute to market stability and milk prices. Global dairy market trends vary among exporters, with Australia showing resilience with a 3% growth, while the US and New Zealand face declines. South America’s situation is more severe, with Argentina’s milk production shrinking by 16% and Uruguay’s falling by 7%. Policymakers, stakeholders, and farmers must unite to counter economic strains and enhance dairy farming.

Learn more:

Global Dairy Cattle Diseases Cost $65 Billion Annually: India, US, and China Hit Hardest

Learn how dairy cattle diseases cost the world $65 billion every year. Which countries suffer the most and why? Uncover the detailed findings now.

The 340 cows at Philipsen Farms dairy near Lacombe, Alta., are milked three times a day. All are registered Holsteins.

With yearly losses at a staggering $65 billion, dairy cow illnesses are not just a local concern but a global economic crisis. The impact is felt in every corner of the world, from India to the United States to China and beyond. These losses disrupt milk production, lower fertility, and directly affect the livelihoods of countless farmers. This is not just a statistic but a pressing issue that demands immediate attention.

Though these costs vary greatly worldwide, “the total annual global losses due to dairy cattle diseases are greatest in India, the US, and China.”

Investigate the financial ruin dairy cow illnesses like mastitis, ketosis, and lameness cause. This study provides a thorough worldwide view and uncovers why specific ailments are more expensive than others.

The Hidden Costs of Dairy Cattle Diseases: An In-Depth Global Economic Analysis

Under the direction of Philip Rasmussen of the University of Copenhagen, a team of researchers has conducted a thorough and innovative study reported in the Journal of Dairy Science that offers a comprehensive worldwide economic evaluation of dairy cow illnesses. Examining statistics from more than 180 milk-producing nations, the research painstakingly examines the financial impact of 12 major dairy cow illnesses and health issues. The researchers not only precisely calculated the worldwide losses using a comorbidity-adjusted technique but also guaranteed that any overlaps in illness effects were considered, hence providing a more accurate estimate. This thorough investigation emphasizes the global broad and different economic load dairy cow illnesses cause.

Twelve major dairy cow diseases, including mastitis (subclinical and clinical), lameness, paratuberculosis, displaced abomasum, dystocia, metritis, milk fever, ovarian cysts, retained placenta, and ketosis (clinical and subclinical), were investigated economically. These illnesses raise culling rates, affect milk output, and change reproductive rates. Precise approximations of their effects enable improved control and lower financial losses.

With a comorbidity-adjusted economic analysis, the researchers painstakingly calculated the cost of dairy cow illnesses. They considered characteristics like milk output, fertility, and culling rates, and compiled data on twelve illnesses from literature covering over 180 milk-producing countries. They standardized these measures for consistent comparability across research to guarantee dependability. This rigorous methodology ensures the accuracy and reliability of our findings.

They then combined these datasets into thorough estimations using sophisticated meta-analysis methods ranging from basic averaging to complicated random-effects models. Correcting for comorbidities was essential to avoid overestimation and to recognize the concurrent incidence of many illnesses with their combined financial consequences.

Equipped with these consistent projections, the group modeled the financial influence using Monte Carlo simulations. They precisely estimated the economic losses by including country-specific data on illness incidence, lactational prevalence, herd features, and economic criteria.

This study depends on adjusting for comorbidities to guarantee that overlapping health problems do not distort the economic effects of different illnesses. Dairy cow infections often coexist and cause combined health problems that distort statistics. Considering these comorbidities helped researchers to estimate the cost more precisely. Without this change, 45% of the worldwide losses would have been exaggerated, distorting the actual economic weight of the dairy sector. This change offers a more accurate knowledge of the financial effects related to illnesses of dairy cattle.

Dairy Cattle Diseases: A $65 Billion Annual Burden with Subclinical Ketosis and Mastitis Leading the Costs

According to an extensive analysis of dairy cow illnesses, yearly worldwide losses amount to US$65 billion. Most importantly, subclinical ketosis, clinical mastitis, and subclinical mastitis surfaced as the most expensive causes of mean annual worldwide losses, ranging from US$18 billion to US$13 billion and US$9 billion, respectively.

DiseaseGlobal Losses (US$ Billion)India (US$ Billion)US (US$ Billion)China (US$ Billion)
Subclinical Ketosis183.62.41.5
Clinical Mastitis132.61.81.1
Subclinical Mastitis91.81.20.75
Clinical Ketosis0.20.040.030.02
Displaced Abomasum0.60.120.080.05
Dystocia0.60.120.080.05
Lameness61.20.80.5
Metritis510.670.42
Milk Fever0.60.120.080.05
Ovarian Cysts40.80.530.32
Paratuberculosis40.80.530.32
Retained Placenta30.60.40.25

In China, the United States, and India, dairy cow illnesses have a negative economic influence. With $12 billion yearly losses, India’s dairy industry’s great size emphasizes the necessity of improved disease control, and the country suffers the most. Veterinary expenses, decreased milk output, and early culling cause the United States to lose $8 billion annually. With China’s industrial-scale dairy production and rising demand for dairy products, its $5 billion losses reflect its industrial nature.

The financial burden of these losses is defined by various measures. When viewed as a proportion of GDP, India’s agricultural economy bears the brunt, highlighting the need for tailored disease control plans. Analyzing losses per capita or as a proportion of overall milk income offers another perspective. The high dairy output quantities underscore the potential for significant financial losses even with a low frequency of illness. This underscores the necessity of customized disease control plans, designed to fit the unique architecture and economic situation of each nation’s dairy sector.

The Bottom Line

This study emphasizes the important role that legislators, scientists, and dairy industry stakeholders play globally. With nearly half of these costs ascribed to subclinical ketosis, clinical mastitis, and subclinical mastitis, it exposes the shockingly high financial cost of dairy cow diseases—$65 billion yearly. The research shows how urgently policies and focused treatments are needed. Countries with the most losses—China, the US, and India—have to lead in putting sensible disease management strategies into effect. Best agricultural techniques, better veterinary care, and strong monitoring systems may help to greatly reduce these losses. All those involved must recognize and solve these financial challenges, thereby guaranteeing the viability of the worldwide dairy sector.

Key Takeaways:

  • Global dairy cattle diseases lead to annual financial losses of approximately US$65 billion, affecting milk yield, fertility, and culling rates.
  • The most significant losses are observed in India (US$12 billion), the US (US$8 billion), and China (US$5 billion).
  • Subclinical ketosis, clinical mastitis, and subclinical mastitis were identified as the costliest diseases, with annual global losses of US$18 billion, US$13 billion, and US$9 billion, respectively.
  • When adjusting for comorbidities, the overestimation of aggregate global losses is reduced by 45%, highlighting the importance of considering disease interactions.
  • Disease-specific losses include lameness (US$6 billion), metritis (US$5 billion), ovarian cysts (US$4 billion), paratuberculosis (US$4 billion), and retained placenta (US$3 billion).
  • The relative economic burden of dairy cattle diseases varies significantly across countries, dependent on metrics such as GDP, per capita losses, and gross milk revenue.
  • Effective and customized disease control plans are essential to mitigate these substantial economic impacts.

Summary: Dairy cow diseases, causing $65 billion in yearly losses, are a global economic crisis affecting milk production, fertility, and farmers’ livelihoods. The largest losses are in India, the US, and China. A study by Philip Rasmussen of the University of Copenhagen evaluated the financial impact of 12 major dairy cow diseases, including mastitis, lameness, paratuberculosis, displaced abomasum, dystocia, metritis, milk fever, ovarian cysts, retained placenta, and ketosis. These diseases increase culling rates, affect milk output, and change reproductive rates. India’s dairy industry suffers the most, with $12 billion yearly losses. The US loses $8 billion annually due to veterinary expenses, decreased milk output, and early culling. China’s industrial-scale dairy production and rising demand result in $5 billion losses. Customized disease control plans are necessary to address these losses.

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