EU dairy product availability: supplies tightened in Q4
Key points:
- Lower production and improved exports drove available supplies lower
- Exports to China improved for butter and cheese
- Demand from MENA, US and China boosted EU exports
Despite this, exports of butter and cheese to China have witnessed an uptick during Q4 compared to a year ago. The boost in Chinese cheese consumption is likely to keep the wheels rolling forward. However, demand for milk powders from China remains subdued. Along with China, exports to US have also grown during the period. Demand from the Middle East, Southeast Asia and Africa continues to be strong.
Butter
The decline in available supplies of butter was driven by lower production, imports and higher exports in Q4. The decline in milk prices and unfavourable weather conditions impacted milk volumes which, in turn, affected the availability of cream for butter production. Demand fulfilment during the Christmas season bolstered exports.
Cheese
Cheese supplies trended down in Q4 2023, driven by a reduction in production, relatively lower imports and robust growth in exports. Demand for cheese has increased as economic conditions are improving. Demand from Australia, China, South Africa, U.A.E and US boosted exports.
Powders
SMP supplies declined by 0.3% year-on-year in Q4 2023. Declines in production and imports were largely offset by lower exports, which were reported to be lower by 15% year-on-year. Domestic buying was also reported to be sluggish.
Availability of WMP also tightened, with supplies declining by 9% year-on-year. Production fell by 1% due to lower milk deliveries. Most of the WMP was made to fulfil contracts. Lower imports and production, coupled with higher exports, tightened available supplies. Exports picked up to countries in the Middle East (Yemen, Israel), Saudia Arabia and Africa (Algeria, Congo, Liberia, Morocco, Nigeria, Tunisia). However, hopes of increasing WMP exports to China stand unfulfilled.
