EU-27 supplies fell 0.5% YOY in July, based on our analysis of data reported by Eurostat and AGEA. The overall YOY decline was driven by a1.2% contraction in Germany, while France was down 1.9%. In the Netherlands milk output contracted by 3.1% while Poland was down 1.1% YOY. This more than offset expansion in Ireland (+3.3%) and Italy (+3.5%). Netherlands is the only country that has reported August milk output data on Eurostat – supplies were down 1.5% YOY, the 9th consecutive monthly contraction.
According to the most recent data, French milk production fell 2.3% YOY in week 35 (ending 5 September 2021), the third consecutive weekly contraction. German supply fell 1% YOY in week 35, the 15th weekly decline in a row. AHDB reports UK production rose 0.7% YOY in the first 11 days of September after falling 0.2% YOY in August.
Our analysis of Eurostat-reported EU27 product mix data shows the cuts in milk powder output continued in July. SMP output fell nearly 10% relative to the same month in 2020 (despite a tight balance sheet), with a corresponding 4.6% YOY decline in butter. We estimate cheese production was down 0.8% YOY in July with lower milk supplies overall, but lifted by 2.6% for the year to date as manufacturers refilled supply pipelines with the gradual reopening of the foodservice sector.