The reduction in milk supply at the end of 2016 contributed to the recovery in EU milk prices, said the European Commission in its short-term agricultural outlook published on Wednesday 8 March.
EU cereal production fell by 5.5% in 2016-2017, following smaller than average soft wheat and maize harvests. “This should result in a slowdown in EU cereal exports”, the Commission says in its outlook. The EU rapeseed harvest was also below average. EU sugar prices are catching up with high world prices. The Commission announced “good prospects” for the 2017-2018 marketing year (see other article).
Milk. The EU raw milk price gained more than €7/100kg in five months, reaching €33.05/100 kg in December 2016, 8% above the previous year. This increase was particularly strong (above 30%) in countries were the decline in price in 2016 had been particularly significant – Belgium and the Baltic states. The rise in milk prices was less pronounced in France, Spain and Italy. The Commission highlights the record price for butter and significant recovery in cheese prices.
In 2017, several factors could affect the milk and dairy product prices: - the upcoming seasonal peak in EU milk collection; - the sizeable dairy herd at the end of 2016 (which indicates a potential for increasing production); - in January 2017 milk collection in Poland was 3.6% above 2016; - EU milk deliveries in 2017 are expected to be 0.6% above last year; - the continuous increase in US supply and an expected recovery in milk collection in New Zealand; - accumulated skimmed milk powder stocks.
Meat. Sustained pig meat exports to China facilitated a recovery in the EU price. By contrast, ample poultry supplies pushed EU prices down. Beef exports are good but there is still no recovery in EU price increases, the Commission notes. The increase in sheep meat production is slowing down as a result of lower prices. (Original version in French by Lionel Changeur)