Brussels, 05/05/2015 (Agence Europe) - After the unexpected rebound in dairy product prices between January and March 2015, downward pressure has been perceptible again since March, according to the report by the European Milk Market Observatory, following its meeting on 29 April.
The Observatory noted a 9% drop in the price of skimmed milk powder and a 3% drop for butter and cheese. Milk production was down by 1% in the first two months of the year 2015 (reduced production in 19 countries of the EU), “but preliminary information on March production shows divergent trends”, the report notes. Buyers have adopted a waiting attitude, in the expectation that milk quota expiry (at the end of March) may spark production increases, pushing prices down. The situation is expected to be clearer once the production peak is passed (mid-May), according to the Milk Market Observatory. Average farm gate prices stabilised at around 32 cents par kilogram between January and March, with considerable variations between the countries.
The assessment of EU stock levels showed decreasing stocks for butter, skimmed milk powder and cheese in the last months: while skimmed milk powder stocks were described as excessive for the moment, but stocks were regarded as only slightly above needs and cheese stocks as normal. The better performance on the cheese side is due to the quick adjustment of cheese manufacturers to the Russian import ban on agricultural products from the EU, the report states.
“Uncertainties for the months to come remain linked to the strength of EU milk production in the post-quota period, China's and Russia's buying behaviour and possible development of their domestic production”, the report explains. For 2015, a 1.5% increase in EU milk production has been forecast (compared to +1.9% in the United States, +2% in Australia and -2% in New Zealand). (Lionel Changeur)