European Milk Supply

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While the last 2 years have certainly been unprecedented it finally now appears as if the good days are coming to an end for manufacturers and prices are tumbling at rapid speed.

The milk supply situation has improved in Europe with the high milk prices incentivising higher production. Favourable weather conditions with milder winter temperatures in October and November also helped to accelerate milk volumes with key countries such as Germany, France, Netherlands and UK all up around 3-4% on last year. This has changed the dynamics considerably and prices have dropped for most dairy products since November. This will now put pressure on the farmgate milk price which is still very high. However input costs for farmers are still extremely challenging with inflationary pressure especially sharp in 2022 so it will be crucial to see how they adapt to any lowering of milk prices.

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