20
JAN
2018

Animal farming

MILK: EU PRODUCTION UP AGAIN. 3.5% IN SEPTEMBER. CLAL: SECTOR FOCUS ON EXPORTS AND SUSTAINABILITY.

Run-up to the Fieragricola Milk Day scheduled in Verona 2 February 2018 with the dairy supply chain.

Milk production in Europe is beginning to grow again. This is confirmed by Clal.it, the landmark portal in the dairy sector, which will take part in the Fieragricola Milk Day on 2 February 2018 dedicated to the dairy supply chain - one of the major innovations for the 113th edition of the international show in Verona.

 

'We are well aware that dialogue between operators is fundamental, as well as a timely analysis of all key market factors' said Giovanni Mantovani, CEO of Veronafiere. 'And Fieragricola is organising Milk Day precisely to promote a broad strategy for the supply chain, accompanying the run-up to the show with information and scenario analysis'.

 

Milk: deliveries up in EU-28

In the period January-September this year, deliveries for EU-28 grew by 0.49% on a trend basis, achieving total production of 118.049.000 tonnes. On its own, this would not be a particularly significant increase; however, the Clal.it team suggests that this trend may well trigger off a downturn in prices for milk at source. The improvement in Italy was more decisive: 9,012,000 tonnes in the first nine months of 2017, 3% more than in the same period of the previous year.

 

'We cannot yet speak of concerns' Clal.it analysts point out 'but it is good practice to monitor production trends in real time so that producers and the supply chain can manage the market. Surplus raw materials, unless accompanied by a significant increase in exports, could well have a significant impact on the EU situation'.

 

After the serious crisis that characterised 2015 and the first eight months of 2016, leading to the closure of many dairy farms in Europe, a new recession in terms of list prices could easily be fatal for thousands of animal farming centres. 'The time is ripe today for farmers to invest in sustainability and new technologies capable of improving company financial statements and responding to the needs of the consumer in terms of the environment, employment and land protection' the Clal team added 'at the same time, processing companies and consortia, especially those representing the main PDO cheeses, must focus on expanding export levels and ensuring the right margins for the supply chain'.

 

Recovery by France and Germany

Based on data analysed by Clal.it, emphasis must also be given to the turnaround seen in Germany and France, the leading two European countries in terms of milk volumes. In September, Germany produced +3.2% than in the same month 2016, continuing the positive trend first seen in August, with +0.9% on a trend basis.

France also posted an increase in milk deliveries of 3.3% in September and, if this trend is confirmed in coming months, there may be repercussions in terms of lower prices even in Italy, since these three markets are strongly interconnected.

On a European scale, September saw 12,323,000 tonnes of milk produced, a leap of 3.5 percent. Exports will therefore be fundamental in order to prevent over-production causing congestion on the European market.

 

Growth in USA and New Zealand

Milk production also increased in the United States (73,654,000 tonnes, +1.5% compared to the first nine months of 2016), and - for the Southern hemisphere - in New Zealand (12,757,000 tonnes, +1.2% on a trend basis).

 

SMP stocks up

The overall picture may also be affected by market stocks. EU storage warehouses for skimmed milk powder (SMP) indicate stocks of 393,007 tonnes, 51.75% more than in the first nine months of 2016. In the USA, stocks also grew by 19.48% to 126,498 tonnes between January and September this year.

 

Concerns in the animal farming world

The European Commission has not announced any alerts but there is no shortage of gossip among producers' representatives. In recent weeks, the spokesman of the Association of German Milk Producers (Bdm), Hans Foldenauer, issued a press warning over a possible fall in prices on commodity exchanges and the consequent risk of a new market crisis. Will exports suffice for Germany? And if, among recipient countries, Germany were to wine even more space in Italy, as happened in the past for drinking milk, what would the consequences be for the Italian market?

 

Source: Fieragricola News

 

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