A new report from the United States Department of Agriculture (USDA) highlights that EU milk production is forecast to fall slightly as a result of declining cow numbers and lower “production profitability” in 2024.
The report compiled by the USDA Foreign Agricultural Service also draws attention to the fact that the “EU dairy sector continues to have concerns connected to the implementation of the new Common Agricultural Policy (CAP) and the EU Green Deal initiatives”.
It states that these are “negatively weighing on farmers’ decisions to continue production”.
“Strengthening EU environmental and climate mitigation policies would require additional, non-productive investments and further erode dairy farming profitability,” the report also details.
Milk deliveries
According to analysis by the USDA Foreign Agricultural Service EU milk deliveries will fall below 2023 levels.
“Since the beginning of 2023, farmers in the EU have had to cope with consistently declining farm-gate prices of milk combined with still elevated production costs.
“This trend is weighing on their margins in 2024, resulting in the elimination of smaller and less efficient farms, and negatively affecting EU27 cow herd numbers,” the report details.
It also highlights that “declining cow inventories” in the EU are expected to be only partially offset by increasing cow productivity which will result in marginally lower milk deliveries in 2024.
According to the USDA report domestic milk consumption is expected to continue to decline.
“With lower milk production in 2024, factory use consumption is also forecast to minimally decrease by 0.3% in 2024.
“This will require dairy processors to carefully decide for which products they will use the available milk,” it detailed.
Cheese production
The report sets out that cheese production is forecast to remain the “primary output goal” of the EU dairy processing industry, supported by solid domestic consumption and continued strong export demand.
“Both cheese exports and domestic consumption are forecast to rise in 2024. Increasing consumption could be boosted by development of the hospitality and tourism sectors and
recovery of the EU economy, while exports are benefitting from increasing demand from key importers.
“After three years of declining cheese exports, EU exports rose in 2023 by 3.6% and are forecast to expand by 2.1% in 2024.
“In addition to a continued recovery in EU cheese exports to the UK, growing popularity of specialty cheeses should also benefit EU exporters,” the USDA Foreign Agricultural Service report highlights.
According to the USDA report a smaller milk supply is likely to be focused on cheese production over butter and non-fat dry milk.”
“Domestic consumption is forecast to continue its declining trend, with consumer health
concerns negatively weighing on their demand for butter.
“EU27 exports in 2024 are expected to decline from elevated 2023 levels,” the report also stated.