Milk output recovers in Germany, France, and Italy amid a price slowdown

European milk production is rebounding as autumn sets in, but not without tension. Germany and France are recording strong annual increases, defying seasonal trends, while Italy shows a milder recovery. Yet rising volumes are already putting downward pressure on milk prices across the EU, and producers remain wary amid the high costs.In Germany, the milk output reached 2.64 million tons. This represents an increase of 4.94% compared to the previous year and a further expansion from the 2.12% increase observed in August. The increase in output was observed across most regions, especially in Lower-Saxony & Bremen (+3.2%). Meanwhile, Saxony was the only region reporting a slight decline in production (-0.2%).The positive results observed since late summer have partially offset an overall contraction in cumulative production, down 1.1% to 24.31 million tons as of September.Milk volumes are currently deviating from the normal seasonal decline, driving an oversupply that is pressuring prices. According to Eurostat, raw milk in Germany averaged €54.01 per 100 kilo in October. Despite representing a 2.49% increase compared to the previous year, it is a significant slowdown from the 9.02% observed in the previous month.Overall, Germany’s milk sector is observing a strong rebound in production, although the expansion remains fragile. Some producers are hesitant about increasing production, given energy and compliance costs, farm exits, and Bluetongue virus risks. Additionally, farmers have concerns about the sustainability of production if prices continue declining.FranceMilk output in France increased by 5.93% over the previous year to 1.91 million tons in September, reflecting an acceleration from the previous month (+4.12%).The positive behavior is expected to continue, underlining the recovery of the sector since late summer. FranceAgriMer data show output above the previous year and the 5-year average through week 42, supported by favorable weather and moderate feed costs. With a 5.1% increase in its production index and positive developments across all producing regions, this suggests that the milk output will remain over the last year during autumn. Cumulative production reached 18.13 million tons as of September, increasing by 0.36% year-over-year.That said, the favorable milk prices incentivizing production are slowing down. Average raw milk prices increased by 4.2% year-over-year to €50.86 per 100 kilo in October, contracting from a 5.71% increase in September. This contraction was mainly driven by the increasing supply and decline in dairy product prices.Despite the output recovery, sanitary risks remain a challenge for the sector. Outbreaks of Lumpy Skin Disease restricted animal transit in the Savoie region. In October, the restriction was lifted in the first zone, although cases remain in other zones. Farmer organizations, such as the Movement for the Defense of Family Farmers (Modef), support a full-scale vaccination instead of extensive culling.ItalyItalian milk production increased by 2.11% compared to the previous year to 1.01 million tons in September, following a 2.4% increase in August.Despite the higher volumes observed in the last two months, this has not offset the negative developments earlier in the year. As of September, cumulative production has decreased by 2.65% compared to the previous year, reaching 9.66 million tons.The more limited expansion of milk output in Italy could explain a higher resilience in milk prices across the region. In October, raw milk averaged €58.25 per 100 kilo, 10% above the EU average. This represented a 10.22% increase over the previous year, with only a slight slowdown from the 10.7% increase observed in September.