High milk prices in the European Union have not offset the rising input costs, which squeezed dairy farmers’ margins, resulting in lower milk output during the first quarter of 2022. Also, it is estimated that 63,000 dairy farms went out of business in 2021, directly impacting milk collection. Consequently, cow’s milk production in the European Union decreased by 0.3% year-on-year (y-o-y) to 35.5 million tonnes.
The milk collection picture throughout the European Union is divided. Italy (+0.8%, +25,000 tonnes) and Poland (+2.9%, +89,500 tonnes) had the best cow’s milk collection y-o-y growth. In Poland, favourable weather and lower dependence on grain feeding helped dairy farmers to forge ahead. However, some top milk-producing countries in the European Union reported a y-o-y decline during the same period, including Germany (-1.9%, -606,600 tonnes), France (-1.5%, -376,860 tonnes) and the Netherlands (-2.8%, -387,000 tonnes).
Milk deliveries declined in major European dairy ingredients’ producing countries, which translated into y-o-y decreases during the Q1 2022 including butter (-3.3%, -16,000 tonnes), SMP (-5.7%, 20,000 tonnes), WMP (-2.2%, 3,350 tonnes) and cheese (-0.9%, 20,000 tonnes). European Union cheese production is estimated to utilise more than half of the milk produced in 2022. Many European Union dairy processors have prioritised cheese production, which offers higher returns and is supported by strong exports and high demand for whey protein concentrate products (a by-product of cheese).
