The year just past was one of two halves in terms of milk supply trends across Europe.
In the first half of 2020, the milk supply outlook in some of the key producing regions of the continent looked like we were going to see a lot of extra milk during the year. In Germany, France, the Netherlands, Poland and Ireland, milk supply was firmly in growth mode in the first half of the year.
However, as the year turned from spring into summer, the growth in milk production began to ease in some key countries such as Germany, France and the Netherlands. Since August, milk production in these three countries has actually been trending lower.
This, coupled with weak milk production in the UK, has supported European dairy commodity prices in the final months of 2020. The drop-off in milk supply in these countries is likely due to the uncertainty created by COVID-19 for much of this year.
However, with the COVID-19 vaccine being rolled out, will this improve farmer sentiment across Europe and lead to an increase in spring milk in 2021? It’s hard to say.
But one thing is for certain, if we see growth in European spring milk supply it will undoubtedly have a negative impact on dairy market sentiment. Conversely, if the current trend of lower production continues in those key countries in the spring months then 2021 could be a very strong year for European dairy markets.