Milk production expands across Germany, France, and Italy

European milk production gained further momentum in October, with Germany, France, and Italy all recording annual increases. While the recovery in volumes is becoming more evident as autumn progresses, price developments are starting to decline, underlining diverging trends across the three countries.Milk production in Germany increased sharply in October, rising by 6.8% over the previous year to 1.05 million tons. This marked the strongest annual increase recorded in any month so far this year and confirmed the steady recovery that has been observed since June, when production was still 2.1% under the previous year.Despite this recent momentum, weaker output earlier in the year continues to weigh on the overall yearly production. As of October, total milk production reached 27.03 million tons, remaining 0.37% lower than last year. Yet, the recent recovery has significantly improved the outlook. Weekly data show production notably over last year, with output 7.1% higher than the previous year by week 48, keeping Germany on track to potentially close the year with a positive annual growth.Milk prices have closely reflected the changes in milk availability. Average farm gate prices declined gradually from €54.65 per 100 kilo in January to €52.51 per 100 kilo in October. With higher baseline prices in 2024, the annual price gap narrowed substantially, moving from +19.1% at the start of the year to -0.36% in October. While prices stabilized month-on-month in November, they remained nearly 4% below the previous year.FranceIn France, milk production continued to grow at a solid pace. October production increased by 5.3% year-over-year to 1.98 million tons, contracting slightly from the 5.9% growth recorded in September. After a weak first quarter, production remained largely positive for the rest of the year, with a notable acceleration during the late summer and early autumn. As a result, cumulative milk production reached 20.11 million tons by October, representing a slight increase of 0.8% compared to the previous year.Unlike Germany, French milk prices did not follow a clear downward trend. Instead, prices fluctuated throughout the year, supported by a more moderate increase in baseline prices. In October, average farm gate prices stood at €51.74 per 100 kilo, up 6% year-on-year. However, the strong expansion in milk availability appears to be starting to influence prices. In November, average prices declined to €49.97 per 100 kilo, only marginally above last year’s level, indicating growing pressure from supply-side developments.ItalyItaly also recorded higher milk output in October, with production increasing by 3.2% year-over-year to 1.05 million tons. This followed a strong performance since August, although production earlier in the year was heavily affected by adverse weather conditions, particularly heat waves during spring and summer. As a result, the recent recovery has not been sufficient to offset earlier declines. Year-to-date production fell by 2.1% to 10.71 million tons as of October. Tighter milk availability has supported prices throughout the year. In October, farm gate milk prices averaged €58.25 per 100 kilo, unchanged from August but more than 10% higher than the previous year. This was the highest average price among the three countries. Nonetheless, as 2024 prices have risen overall, the annual price premium has narrowed significantly, declining from 17.6% in January to just over 6% by November.