New figures from Eurostat show that German milk production is steadily slowing over recent months.
For December, German milk production was down 1.1% year on year to just under 2.6bn litres.
The decline in December milk production in Germany follows similar declines each month since August last year.
The December milk supply figures mean German milk production for the full year of 2020 finished at just 31.5bn litres, which is pretty much in line with 2019 production levels.
Germany is the largest milk producer in Europe and can have a major bearing on dairy market sentiment.
The weakness in German milk supply appears to have continued into the first two months of 2021, which bodes well for spring dairy prices.