Raw Milk Prices in EU Decline Amidst Rising Auction Prices for Dairy Products

The European Union's dairy market is showing mixed signals, with a recent auction indicating rising prices for certain milk products, while official figures reveal a continued decrease in the average raw milk purchase price.

In the latest auction, the price index for raw milk climbed for the second consecutive time, following a 1.5% increase. This upward trend was driven by significant price hikes in key commodities. Lactose prices surged by 4.1%, cheddar cheese by 3.8%, and skimmed milk powder by 1.2%. Other products also saw increases, including mozzarella cheese (1%) and whole milk powder (0.2%). Conversely, buttermilk powder prices fell by 2.8%, butter by 2.3%, and anhydrous milk fat by 0.8%.

Despite these auction results, preliminary data from the European Commission's Milk Market Observatory indicates a different trend for raw milk. In June, the average purchase price for raw milk across the EU dropped by 0.7% to 42.34 euro cents per kilogram. This marks the ninth consecutive month of price decline since September of the previous year, when the price averaged 53.4 euro cents per kilogram, representing a total decrease of 20.7%.

Milk collection saw robust growth in the first quarter of this year in countries such as Germany, the Netherlands, France, Belgium, and Poland. Projections suggest that EU milk production will increase by 1.6% this year. However, the growth rate is expected to slow in the latter half of the year due to rising costs impacting farm profitability. Cheese production is anticipated to rise by 1.8% and whey by 1.4%. Skimmed milk powder production is projected to grow by 6.9%, while butter production is expected to benefit from increased raw milk supply. In contrast, whole milk powder production may decrease by 3.1%, and fresh dairy product output by 0.6%.