2020 EU milk deliveries will grow by one percent
28.10.2020 16:45 "Agro Perspectiva" (Kyiv) —
Following are selected highlights from a report issued by a U. S. Department of Agriculture attache in The Warsaw (EU), Post estimates that 2020 EU milk deliveries will grow by one percent over 2019 due to continuing export demand for dairy products, stable domestic demand, and market interventions introduced by the EC in June 2020. Production growth will be limited due to lower dairy herd inventories. Post expects that dairy processors will increase production of cheese, butter, WDM, and NFDM because of higher milk deliveries. 2020 cheese production will increase over 2019 levels due to higher export demand. Dairy cow inventories will continue to decline through 2020 and 2021, following a general trend toward smaller herds and more productive animals. However, milk output will not be negatively affected, as better herd management, including high-quality genetics, has increased milk yields and can compensate for the smaller herd size. Read more CASEIN. UKRAINE. FORECAST FOR THE SECOND HALF OF THE YEAR Post estimates that in 2020, domestic consumption of butter, cheese, and WDM will remain about the same as 2019 levels, while NFDM consumption will decrease from 2019 and return to historic average levels. In 2018 and 2019, domestic NFDM consumption was artificially high following the EC’s release of public intervention stocks on to the market. Fluid milk consumption in 2020 will increase because COVID-19 will temporarily change consumer consumption trends. Post forecasts that fluid milk consumption will decline in 2021, as the long-term shift away from fluid milk toward other dairy products and milk substitutes will resume. Post forecasts that 2021 cheese and butter consumption will increase with higher production. 2021 WDM and NFDM consumption will plateau. According to Milk Market Observatory* (MMO) in August 2020, the EU farmgate price for raw milk was ˆ32.7 ($38.6) per 100 kilograms, three percent below August 2019. Although farmgate milk prices declined from January to June 2020, prices have rebounded since July. As of October 4, 2020, the EU27+UK cheese (cheddar) price was three percent above the October 2019 price, while WDM, butter, and NFDM prices were eight, five, and five percent, respectively, lower than October 2019 prices. Post estimates that 2020 cheese exports will continue to grow due to strong global demand. Despite supply chain issues and temporary drop in demand from the food service sector following COVID-19, cheese, butter, WDM, and fluid-milk exports will increase from 2019. Post estimates that 2020 NFDM exports will decline from 2019 due lower anticipated demand from China and Southeast Asia and the EU’s decision to release its NFDM public intervention stocks in 2019. In June 2020, the EC introduced the Private Storage Aid (PSA) program in response to COVID-19 market volatility. PSA subsidizes private storage for cheese, NFDM, and butter for up to six months. Post expects this program to terminate before the end of 2020. According to MMO, as of August 2020, PSA cheese, NFDM, and butter stocks amounted to 33,794 metric tons (MT), 18,120 MT, and 63,691 MT, respectively. The EC also opened its public intervention scheme for butter and NFDM from March 1 to September 30, 2020. As butter and NFDM market prices were above intervention prices, butter and NFD were not eligible for intervention storage.
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