The Mintec price for European cheddar cheese stood at EUR 3,140/MT on 23rd June, up slightly by 2% quarter-on-quarter (q-o-q).
Despite a drop in EU milk collection between January and April 2021, cheese production increased by 3% year-on-year (y-o-y) to 3.1 million tonnes during the same period. European dairy manufacturers focused on cheese production, aiming to achieve higher revenues. This was above most market expectations, and subsequently kept a lid on the price increase. All the main EU cheese producers have reported a y-o-y growth during Jan-Apr 2021 period: Germany 837,100 tonnes (+1.6%), France 571,700 tonnes (+1.3%) and Italy 397,700 tonnes (+6.2%).
On the demand side, slower-than-expected European cheese retail demand after Easter and delayed re-opening of the foodservice sector, along with bad weather, constrained cheese consumption. The poor performance of EU cheese exports did not support cheese prices. During Jan-Apr 2021, the EU exported 435,000 tonnes of cheese, up marginally by 0.5% y-o-y. EU cheese exports suffered from the Brexit aftermath, with a drop of 17,600 tonnes in exports to the UK during the Jan-Apr ’21 period (-13% y-o-y). Exports to Asian markets have offset weaker trade with the UK, as exports to China surged by 119% to reach 14,300 tonnes.
However, in the next quarter, it is expected that more milk may be channelled to butter and SMP production, at the cost of cheese production. This should support EU cheddar prices further in the third quarter of 2021.