The rapid acceleration of Europe's milk production

What happens with high milk prices, favorable weather, and ever-decreasing feed prices? The answer is easy to guess: in almost all of Europe, milk production has significantly increased in recent months. The most recent supply figures indicate that the crash in the dairy market did not come out of nowhere. That production is surging in the largest milk-producing countries at the same time is rare. Usually, gains and losses in one member state can offset each other. In any case, the higher milk production is an unfortunate coincidence for the market, which has plummeted significantly in recent weeks. And it's not only in our part of Europe that there is a lot of milk. On the other side of the North Sea and the Atlantic Ocean, milking is also in full swing. The situation is reminiscent of 2022 when European milk production also rose rapidly, and the market subsequently took a hard hit. We summarize the developments in order of magnitude. Germany: plus 2.1 percent German dairy farmers may have increased production the most. In June, the supply was still more than 2% below last year's level. Two months later, an increase of more than 2% was evident. The growth has continued into September as well. Preliminary figures from AMI show that weekly production is now 5% (!) above last year's level. Like the Netherlands, Germany experienced a dry spring, but in July and August, the country was gifted with much rain, resulting in a significant increase in milk production. The mild bluetongue outbreaks this summer also play a role in this development. France: plus 5.6 percent French milk supply has been above last year's level since March, but the lead was significantly expanded in August to the highest level in ten years. With an increase of over 5%, the supply in August was above the long-term average for the first time since 2022. As elsewhere in Europe, high milk prices are having an impact. It is notable that the milk price has been somewhat under pressure since the beginning of this year, but with prices just below €50, French dairy farmers can achieve high margins. Weekly figures from FranceAgriMer show that growing production has continued into September. Poland: plus 3.5 percent Polish milk production showed shrinking figures in the first half of this year, but that is no longer the case. In August, the lead was expanded to 3.53% compared to the same month a year earlier. Poland has significantly increased the export of dairy products within Europe this year. This is one of the causes of the recent price pressure on the European dairy market. Polish dairy farmers have been receiving generous payout prices equivalent to over €50 per 100 kilos, which has stimulated production. However, forecasts for the remainder of 2025 and 2026 have been revised downwards. Netherlands: plus 4.8 percent Dutch milk supply has further increased in August. More milk was produced than in the same month last year. The content levels have also risen again. What is striking about the latest figures is not only the higher supply but also the fact that, with the figures for July and August, a break from the previous years has occurred and is continuing. Normally, supply would decrease further from summer onward. The fact that this is not happening is due to a disrupted calving pattern caused by bluetongue. Italy: plus 2.5 percent Italian milk production shows a surprising break in trend with an increase of 2.5% in August. The increase in milk is putting pressure on Italian spot milk prices. In a short time, prices have plummeted from nearly €70 per 100 kilos to just above €50 by early October. In addition to the increase in milk production in Italy, cheap supply from other European member states such as the Netherlands, France, and Belgium is causing additional price pressure. Ireland: plus 6.8 percent In Ireland, milking has been strong throughout the year, with another record volume in September. High milk prices and favorable weather are the main reasons for this. However, in the longer term, shrinkage looms as it remains uncertain whether the country can continue to rely on derogation for more flexible manure standards. The European Commission is expected to make a decision by the end of the year on whether the derogation for Ireland can be maintained from January 2026. The increase in Irish milk production is significantly affecting the European mainland, as Ireland is exporting large volumes. Irish milk processors claim to have large stocks, which is inconvenient for them now that the market is under significant pressure. Therefore, the Irish are proactive in reducing the milk price, with prices around €45 per 100 liters. Milk production is also high in the United Kingdom, with a lead of over 5% compared to last year in August. This was also the highest level ever. Belgium: minus 0.53 percent In June, Belgian milk production was still 8% (!) behind last year. In August, the gap had narrowed to about 0.5%. The recovery will be beneficial for the Belgian Confederation of the Dairy Industry (BCZ), as they recently expressed concern about the decline in the milk supply. The recovery, like in other member states, is fueled by relatively high milk prices and low feed costs.