Following a downward correction in the first half of 2023, raw milk prices in the EU rose in Q3 2023 and became stable in the early months of 2024, according to the latest analysis published by the European Commission.

EU milk deliveries remained quite stable in 2023, which, combined with improved fat and protein content, provided a steady supply for the dairy industry.

Weather conditions were more favorable than in the difficult year of 2022, and feed costs decreased, supporting an increase in EU milk production (+1.8%), even though the dairy herd continued to decline (-1.7%).

While global demand for dairy products remains relatively tight, EU exports recovered and increased especially for skimmed and whole milk powder, as well as for whey, cheese, and butter.

In 2024, EU cheese and whey production is likely to continue benefiting from greater availability of milk solids and competitive prices, potentially leading to further growth in their EU exports (+2.5% and +2.5%, respectively).

On the other hand, further growth in EU milk powder exports is unlikely due to the limited potential for additional growth in North African and Middle Eastern markets (which drove export growth in 2023), while global competition may also increase.

Despite the continued decline in the dairy cow herd (-0.5%), EU milk supply is expected to remain relatively stable in 2024 (+0.4%).

Stabilization of input and output prices could improve margins for dairy farmers in 2024, while EU dairy product consumption could benefit from some easing of food inflation and remain generally stable. (Photo: Dreamstime)