March 1, 2012

 

World demand lifts EU dairy export potential

 

 

The milk production in the EU is estimated at 151 million in 2011 and is expected to remain similar in 2012 and 2013.

 

EU's cow milk deliveries to dairies are estimated to have increased by 2% in 2011; with France, Germany, Ireland, Poland, the UK and Austria as the main contributors to the growth. This positive trend is expected to continue, albeit at a slower path, in 2012 and in 2013.

 

Milk production is estimated to have increased by 1.5% in 2011, and is expected to continue increasing in the next two years. The average yield per dairy cow is estimated at 6,431 kilogrammes in 2011.

 

A continuous increase in milk yields both in EU15 and EU12 would compensate for the contraction in the dairy herd, which is estimated at - 0.8% in 2011 and to decline further in 2012 and 2013.

 

On the basis of Eurostat data on milk delivery, a number of Member States appear to be on course of overtaking their national quota ceilings.

 

Milk producers may try to adjust their delivery pattern accordingly in the final weeks of March, which would influence the quantity of milk available for processing.

 

Total cheese production is estimated to have slightly increased in 2011. Domestic use is expected to have remained broadly unchanged, and demand from importing third countries slightly increased, despite a modest reduction in Russian imports of EU cheese, with total EU exports estimated to have increased by a mere 0.9%, compared to 2010.

 

Production is expected to increase further in 2012 and 2013, at a growth rate of 0.8% in both years, sustained by a potential for consumption growth in EU12 and improved export performance.

 

After a positive production trend registered in 2010 for fermented milk, drinking milk and more so for cream, total fresh dairy production is estimated to have slowed down its expansion in 2011. Production is expected to continue growing, in 2012 and 2013, in view of prospects for sustained domestic and world demand.

 

Whole milk powder (WMP) production is estimated to have contracted in 2011, by -3%, as compared to 2010 and a rather stagnating trend is foreseen in 2012 and 2013. EU WMP exports are estimated to have declined in 2011, but a slight recovery could be expected in the near term due to better EU price competitiveness and a more favourable exchange rate.

 

Skimmed Milk Powder (SMP) production is estimated to have increased by 13% in 2011. A further expansion could be possible in 2012 and 2013, by 4% and 2% respectively. Market perspectives would continue to be driven by a strong import demand.

 

Exports are estimated to have grown by 37% in 2011, and they are forecast to stay at this high level during the next two years. China has been gradually becoming an important player in world SMP imports, but a substantial increase in exports to North African countries has also taken place. SMP intervention stocks built up in 2009 are expected to be completely sold out by the end of 2012 through the most deprived person's scheme.