EU Milk Production to Remain Stable in 2024 Despite Challenges - USDA
Source: The DairyNews
Milk production in the European Union (EU) is expected to remain relatively stable in 2024, according to the USDA's latest World Market and Trade report on dairy.
Improvements in output per cow are being counterbalanced by a decline in the overall dairy herd, which has dropped below 20 million cows. This ongoing decrease is attributed to various factors, including lower milk prices and higher production costs. These economic challenges have led to the exit of smaller, less efficient farms fr om the market, reducing overall milk production capacity.
Environmental regulations are also influencing milk production. Efforts to reduce nitrogen emissions in countries such as the Netherlands and Ireland are expected to further decrease herd sizes. These environmental measures, coupled with difficulties in generational renewal—where younger individuals are less inclined to take over dairy farming due to its demanding nature and limited profitability—are contributing to market consolidation. Larger farms are better positioned to maintain their herd sizes, potentially mitigating the reduction in cow numbers.
Since early 2023, the profitability of milk production has been on the decline, with farm-gate milk prices falling while input costs remain high. This squeeze on profit margins is impacting farmers' decisions to continue milk production, accelerating the decline in cow numbers. Although there was a temporary increase in milk deliveries in early 2024, these gains are not expected to be sustained throughout the year as farmers who postponed exiting the industry in 2023 are likely to do so in 2024.
The spring season of 2024 saw favorable weather conditions in most parts of Europe, with warm temperatures and adequate rainfall benefiting pasture conditions and green feed availability. However, some regions in northwestern Europe experienced excessive rainfall, hindering field access and grassland re-growth, particularly in countries like Ireland wh ere pasture-based systems are predominant.
Environmental regulations are also influencing milk production. Efforts to reduce nitrogen emissions in countries such as the Netherlands and Ireland are expected to further decrease herd sizes. These environmental measures, coupled with difficulties in generational renewal—where younger individuals are less inclined to take over dairy farming due to its demanding nature and limited profitability—are contributing to market consolidation. Larger farms are better positioned to maintain their herd sizes, potentially mitigating the reduction in cow numbers.
Since early 2023, the profitability of milk production has been on the decline, with farm-gate milk prices falling while input costs remain high. This squeeze on profit margins is impacting farmers' decisions to continue milk production, accelerating the decline in cow numbers. Although there was a temporary increase in milk deliveries in early 2024, these gains are not expected to be sustained throughout the year as farmers who postponed exiting the industry in 2023 are likely to do so in 2024.
The spring season of 2024 saw favorable weather conditions in most parts of Europe, with warm temperatures and adequate rainfall benefiting pasture conditions and green feed availability. However, some regions in northwestern Europe experienced excessive rainfall, hindering field access and grassland re-growth, particularly in countries like Ireland wh ere pasture-based systems are predominant.
