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EU Milk Output Strong So Far, Weighing Now With Seasonal Profile

By Publications Checkout
EU Milk Output Strong So Far, Weighing Now With Seasonal Profile

EU milk output performed strongly in the first half of 2018, up 1.8% on the previous year, Glanbia Ireland reported, but growth now slowing in-line with the seasonal profile.

The group highlighted that the hot and dry weather conditions experienced across the EU this summer will likely result in an increase in feed costs coming into the winter months.

It reported that the EU Commission’s outlook for milk output is that it will grow by 1.2% this year, but stall somewhat to only 0.8% in 2019.

Dairy Markets

For cheese, it said that EU curd and UK cheddar markets are holding firm, but Brexit worries could see a rush of UK cheddar orders in Q4 2018 and higher stock holding in the UK in Q1 2019 ahead of the withdrawal date. Softer demands are hitting EU cheese exports, in particular in Middle East North African regions.

Butter prices have retreated, the Irish dairy co-op said, after a rise this August. There is now a €1,500 differential between EU and weaker Global Dairy Trade (GDT) butter prices with more butter added to the GDT platform.


It’s not only Brexit birthing uncertainty in the market, with many eyes on the US-China trade war. Glanbia noted that China imposed an additional 25% tariff on US dairy imports this summer, and has imposed additional tariffs on lactose, WPC80, and infant formula since.

While the US and Mexico have reached partial agreement to resolve the NAFTA conflict, additional tariffs imposed by Mexico on US cheese (20-25%) will remain in place for now, which will put pressure on Canada to remain part of the three-nation deal which could mean concessions on their dairy sector.

Global dairy market outlook seems ‘somewhat choppy’ for the months ahead, the co-op said, as key factors which are likely to impact on global dairy markets include constrained Northern Hemisphere production growth, trade uncertainty, weaker global demand and generally robust domestic demand at EU and US level.

© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition. 

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