European Milk Production Stability Amidst Strategic Adjustments by Multinationals
Source: DairyNews.today
In the current dairy market landscape, Europe's principal supply nations have maintained consistent production levels despite the shifting economic forces. The emergence of high pricing and diverse supply origins has prompted multinational corporations to revisit their strategies regarding anhydrous milk fat (AMF) procurement.
Notably, Fonterra’s strategy, which concentrates on whole milk powder (WMP) pricing, appears to position it advantageously against rivals who are diversifying into non-WMP assets.
Variable Production Patterns Observed in European Milk Season
This year, France has again experienced a subdued milk production season. However, the "shoulder" period—typically a transitional phase in milk collection—has witnessed a resurgence, surpassing initial projections. Conversely, Germany has demonstrated robust production throughout the season. Despite a sharp decline at the end of June, milk collections normalized in July, aligning closely with the volumes recorded in July of the previous year.
Across the key players—Germany, the UK, and France—the cumulative milk production up to week 30 has shown a marginal decline of approximately 0.2% year-on-year, with slight improvements noted from the preceding season.
Eastern European Sugar Beet and Milk Production Trends
The sugar beet sector in Eastern Europe has shown significant strength this season. A notable development is the export of white sugar from Polish ports, marking a first for the August settlement period. This trend correlates strongly with the robust milk production observed in Eastern European countries up to June, suggesting a potential continuation of milk production growth exceeding 5% annually from nations like Poland.
Market Dynamics for Milk Derivatives in Europe
Currently, the European market exhibits a higher profitability for selling Skimmed Milk Concentrate (SMC) over dry Skim Milk Powder (SMP). This situation introduces a dynamic market scenario, particularly as industry observers typically anticipate an increased production of milk powders during the EU's "shoulder" season, which would compete with the onset of the milking season in Oceania.
Variable Production Patterns Observed in European Milk Season
This year, France has again experienced a subdued milk production season. However, the "shoulder" period—typically a transitional phase in milk collection—has witnessed a resurgence, surpassing initial projections. Conversely, Germany has demonstrated robust production throughout the season. Despite a sharp decline at the end of June, milk collections normalized in July, aligning closely with the volumes recorded in July of the previous year.
Across the key players—Germany, the UK, and France—the cumulative milk production up to week 30 has shown a marginal decline of approximately 0.2% year-on-year, with slight improvements noted from the preceding season.
Eastern European Sugar Beet and Milk Production Trends
The sugar beet sector in Eastern Europe has shown significant strength this season. A notable development is the export of white sugar from Polish ports, marking a first for the August settlement period. This trend correlates strongly with the robust milk production observed in Eastern European countries up to June, suggesting a potential continuation of milk production growth exceeding 5% annually from nations like Poland.
Market Dynamics for Milk Derivatives in Europe
Currently, the European market exhibits a higher profitability for selling Skimmed Milk Concentrate (SMC) over dry Skim Milk Powder (SMP). This situation introduces a dynamic market scenario, particularly as industry observers typically anticipate an increased production of milk powders during the EU's "shoulder" season, which would compete with the onset of the milking season in Oceania.
