The latest figures from the EU Milk Market Observatory (MMO) show that Irish milk production is, as anticipated, growing at a much faster pace than the rest of Europe. Milk deliveries to Irish processors from January to July this year are 8.6% ahead compared with the same period last year. Deliveries from April to July this year, during which peak production occurs in Ireland, are over 12% ahead of the same period in 2014.

The latest EU MMO figures also show that during the period from April to July, milk deliveries to processors are significantly ahead of last year in some of the largest dairy-producing countries in the EU. Dutch milk deliveries from April to July are 7% ahead of last year, while German deliveries are 2.4% ahead. In the UK, milk deliveries are 2.2% ahead year-on-year.

Product mix

ADVERTISEMENT

European dairy processors appear to have altered their product mix this year to chase value in global dairy markets. Much of the increased supply has been translated into butter and SMP, products which have been more resilient to the weak markets than the rest.

EU cheese production has remained relatively stable compared with last year, despite the closure of the Russian market – a major destination for European cheese. However, EU production of WMP has substantially decreased as processors move away from the hard-hit commodity.

The latest MMO report also notes that feed costs are back 6.5% in the last four weeks, which is helping production levels from EU dairy farmers.

Over the last number of weeks, international markets have shown flickers of optimism with an apparent bottom reached in the serious decline seen in dairy markers over the last six months. Quotations from international markets were positive again last week on the back of the previous week’s bounce in the Global Dairy Trade (GDT) auction.