European Union: Dairy and Products Annual

After an EU-wide drought in 2022, the EU27 dairy herd is forecast to drop below 20 million head in 2023. This will lead to a continued decrease in milk production and deliveries for factory use despite higher farm gate milk prices. As EU dairy processors continue to favor cheese production, the decrease in milk deliveries will be at the expense of butter and non-fat dry milk (NFDM), and, to a lower extent, lower whole milk powder (WMP) production, despite high world market prices. EU27 domestic consumption of cheese is forecast to return to its increasing trend in 2023, after a short dip in 2022, while butter consumption is forecast to decrease in response to the high prices. Domestic consumption of NFDM and WMP is rather stable in the EU, while EU27 dairy powder exports are forecast to decrease in line with the decrease in production. While EU27 butter exports are foreseen to further slowly increase, EU27 cheese exports are forecast to decline.