MD_DA100 European Dairy Market Overview Report 37 - Released on September 15, 2022 WESTERN EUROPEAN OVERVIEW: Western European milk output has continued the normal seasonal decline. Production typically reaches the annual nadir in October or November depending on location. Within pockets of Europe, the summertime heat and drought have eased, but milk production is still weak and milk components are low. According to CLAL data made available to USDA, July EU cows' milk delivered to dairies is estimated at 12,551,000 MT, up 0.3 percent compared to last year. EU cows' milk delivered to dairies January - July 2022 is estimated at 86,623,000 MT, down 0.5 percent when compared to January - July 2021 EU milk production. Among some of the top Western EU milk producers, the January - July 2022 milk deliveries and the year-to-date percentage changes compared with January-July 2021 are Germany, 18,901,000 MT, -1.3 percent; France, 14,479,000 MT, -1.3 percent; Netherlands, 8,132,000 MT, -0.2 percent; and Italy, 7,888,000, +0.2 percent. Industry sources also say that milk production is decreasing in the United Kingdom. Some reports indicate that August 2022 milk deliveries were down approximately 1.4 percent compared to August 2021 milk deliveries. Industry analysts suggest that the milk herd continues to contract. Although there are reports that youngstock numbers are increasing, some sources feel that financial pressures faced by farmers could lead to additional herd reductions. Tight milk supplies, limits on gas and energy reserves, and a limited labor pool have created a scenario of weak supplies of milk and dairy products. On the other hand, higher prices have kept consumer demand in check. The industry is trying to work through the uncertainty of a market driven by weak supply and weak demand. In addition, some dairy processors are trying to balance their strategies between helping consumers navigate higher food prices and helping their dairy farm producers overcome the financial stress of inflated production costs. In an effort to help protect their milk production supply, at least one European processing company will be issuing a supplemental payment to its farmer owners to ease some of the impacts of higher production costs. EASTERN EUROPEAN OVERVIEW: Like their Western European counterparts, Eastern European dairies are experiencing the normal seasonal decline in milk output volumes. However, some countries have seen year over year milk growth in 2022. According to CLAL data made available to USDA, the provisional July 2022 cows' milk production in Belarus was 703,000 MT, up 1.3 percent from July 2021. January - July 2022 milk production in Belarus, 4.606 million ton, is unchanged from January - July 2021 according to CLAL data made available to USDA. For Eastern EU27 countries, January - July 2022 cows' milk delivered to dairies in Poland was 7,608,000 MT, up 2.1 percent from January - July 2021. As expected, milk production has declined in Ukraine because of the conflict with Russia. Ukrainian agricultural sources estimate the number of cows as of August in the country has decreased by approximate 15 percent, and milk production has decreased by approximately 14.4 percent. Information for the period September 5 - 16, 2022, 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 DMN MARS (My Market News): https://mymarketnews.ams.usda.gov