MD_DA100

     European Dairy Market Overview

     Report 11 - Released on March 16, 2023

          WESTERN EUROPEAN OVERVIEW:
          Seasonal milk production continues to grow across much of western Europe. While adverse
     weather periodically inhibits weekly milk collection growth, the general trend has been
     toward higher milk outputs in much of northern Europe to start the year. However, in parts
     of France and southern Europe, drier conditions have prevented a strong start to the milk
     production year. According to CLAL data made available to USDA, the provisional January
     2023 cows' milk delivered to dairies in the UK was 1,295,000 MT, up 1.9 percent from
     January 2022. Total year milk deliveries in the UK for 2022, 15,364,700 MT, was 0.5 percent
     less than total milk deliveries in 2021. Industry contacts project 2023 milk volumes in the
     EU may be like last year. However, concerns about falling commodity prices, weak demand, and
     regulations may keep milk production capped.

          Farmers in Belgium and the Netherlands drove tractors to their nations' capitals in
     protest over proposed nitrogen emission regulations. The new rules would curtail the
     efficacy of animal agriculture in parts of the two countries. The protests come a few days
     before the Belgian-Flemish regional government wants to decide on the proposed rules and the
     regional elections in the Netherlands that would shape the next Dutch Senate.

         A European dairy trade association released its report on 2022 dairy trade. The report
     suggests global dairy exports finished the year, 2.2 percent lower than 2021, the first
     decline in global trade in the last two decades. EU exports decreased in almost all dairy
     categories, with milk powders declining the most. The report suggests less milk availability
     and lower competitiveness on the world markets were driving forces with the lower export
     numbers. EU dairy exports to China, Indonesia, Malaysia, Philippines and Thailand decreased
     between 17 and 22 percent last year.

          EASTERN EUROPEAN OVERVIEW:
          Milk production in 2022 exhibited strong growth in such eastern European countries as
     Poland and the Czech Republic. Seasonally, milk deliveries are growing in eastern Europe.
     And while milk output growth is anticipated in parts of the region, the war between Ukraine
     and Russia will weigh heavily on other parts of the region. Ukrainian officials note
     increased prices for feed and energy; the destruction of key components of the country's
     energy infrastructure; and lower prices and greater market uncertainties for dairy products
     as significant challenges. Exports were critical to maintaining the Ukrainian dairy
     industry. However, with falling commodity prices, the attractiveness and value of dairy
     exports are decreased.

          The deal to keep Black Sea ports open to grain shipments is set to end March 18th,
     unless Ukraine and Russia agree to an extension. Ukraine feels the deal should be extended
     indefinitely, with additional ports added to the agreement. However, Russian officials are
     concerned that Russian farm interests have not been considered. Russia would like to see
     requirements placed on its payments, logistics and insurance industries relaxed to better
     facilitate the export of Russian grain and fertilizers. A UN official stated both Russian
     and Ukrainian food and fertilizer exports are essential to global food security and food
     prices.



     Information for the period March 6 - 17, 2023, issued biweekly

     Published by:
     Dairy Market News - Madison, WI
     MIKE BANDLI, (608)422-8592
     Email: mike.bandli@usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
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