I was asked over Christmas in what countries is milk production actually growing in the EU.
The fact that EU milk quotas were removed over five years ago now, where is the wall of milk coming from that was going to swamp milk price forever?
That pessimistic tune was what some people were saying in the run-up to quota removal – ‘don’t remove quotas as we’ll never see milk price as good again’.
The fact is milk price has probably been better in the five years since quotas were removed than the five years prior to 2015.
Farm-level production of fat and protein has been better, so farmgate price is better as well. Irish farmers have benefited on the back of this growth and better production.
Significant milk production
To get back to the first question – where in the EU is milk growing?
The fact of the matter is there are five countries in the EU where milk production is significant (ie over 10 billion litres).
Germany (32.5bn), France (24.6bn), The Netherlands (13.9bn), Italy (12.5bn) and Poland (12.4bn). After that, you are down to countries such as Ireland and Spain that are shy of the 10 billion litres, but both produce over eight billion litres.
So of these seven countries – where is milk growing?
If we take a 10-year window, Germany, The Netherlands, Italy, Poland, Ireland and Spain have all grown output 20% to 30% since quotas were removed. France has flat-lined in milk production over the last 10 years.
So where is it growing in the last one to two years and into the future?
Of the seven countries, Poland and Ireland are probably the only two that have capacity left for additional growth. The rest look to be on a downward slope in terms of milk supply with environmental regulations, farm policy or a combination of both limiting supply.
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