The slight increase in EU milk deliveries in 2015 (at around 1%) hides significant differences in the development of milk production in the EU Member States, according to the European Commission’s latest analysis of the sector.
Milk delivered to dairies are expected to increase by more than a 100,000t in 2015 in the Netherlands, Ireland, Poland, the UK, Spain and Denmark.
In the Netherlands, the Commission says the huge increase projected this year (close to 600,000t) was driven by the good prices experienced in 2013 and 2014, however farmers have also accelerated production in view of maximising their phosphates ceilings which were still to be fixed.
It says a lower growth can therefore be expected next year.
In Ireland (close to +500,000t), the Commission cites our farmers lower production costs because of the large use of grass, a slowdown in the growth might take place once the cows are in-door, but Ireland should become the main contributor to production growth next year.
In Denmark (+100,000t), it says milk deliveries started to grow significantly post quota compared to last year only during summer but this increase is expected to last leading to potentially 200,000t of additional milk delivered in 2016.
Following the abolition of quota, farmers in these Member States have answered very positively to the invitation of their processing industry to produce as much as they like.
In the United Kingdom (+150,000t), the Commission says the ample herd took advantage of the good grass availability, however a slowdown in milk deliveries growth can already be observed and should continue until the end of the year (as in Belgium).
In Poland, it says productivity growth is the main factor for higher deliveries (close to +200,000t). Other eastern countries have significantly contributed to the higher 2015 post quota deliveries: the Czech Republic, Hungary and Slovakia.
According to the Commission In these Member States, where production never reached quota, the main driver for growth has been the high milk prices in 2013-2014.
Slowdown
The slowdown in production is currently particularly pronounced in these countries as well as in Portugal.
On the other hand in France and Germany, it says 2015 milk collection is expected below 2014 by around 150,000t each. This compares to exceptional increases the year before (1.3 and 1.1m tonnes respectively).
In addition, the Commission says there are significant regional differences in both countries.
In France, the production decline is particularly pronounced in the southern part.
Two major French cooperatives have also implemented an A/B/C price system limiting the incentive for farmers to produce more than their quota reference. In addition, private companies (which collect half of the milk in France) have also limited the possibility for farmers to deliver more in view of the decline in dairy products price.
The Commission says it might be difficult for France to continue refraining most productive farmers to produce and higher deliveries are expected in 2016.
In Germany, it says the production decline is concentrated in the old ‘Lander’ and directly linked to the reduction in milk collection at the beginning of the year to limit surplus-levy bill.
After the end of quota, milk collection increased slowly compared to the already high 2014 level of production.
Therefore, the Commission says growth in milk deliveries can be expected next year as the production in January–March 2015 was relatively low.
