18 March 2011

2 minute read

This report provides an overview of the conditions for the dairy market during the whole year 2010.

It notes that the dairy market continues its recovery observed in the last report presented to the agriculture Council in December 2010. Fuelled by favourable weather conditions, dynamic demand and attractive milk prices, milk collection in the EU-27 increased by 1.23 per cent in 2010. On an overall basis for the EU-27, the quota year is projected to end with an estimated six per cent underuse of milk quotas.

The increased milk production has been converted into value added dairy products (yoghourts, cheese and others) that experienced an increase in production in line with demand, while dairy commodities (butter, butteroil and skimmed milk powder (SMP)) registered lower production levels.

The annual average milk price paid to producers in 2010 was 15 per cent higher than the average price paid in 2009. EU average prices for dairy products continue to be largely above intervention levels. While cheese prices remained rather stable over the last three months, butter prices increased by eight per cent and milk powder prices surged. The year 2010 had been particularly successful for EU dairy exports, especially for SMP, butter and cheese.

As a reaction to the crisis in the dairy sector, the Commission committed in May 2009 to report every three months on the situation in the dairy market.

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