Growth in EU milk production has fallen from around +5.1 per cent to around +0.8 per cent within just a few months. According to StoneX, this is the sharpest decline amongst the world’s leading milk exporters. Lower milk prices, higher feed costs and unfavourable weather conditions during the summer have all placed a strain on European dairy farms simultaneously. For milk processors, this trend is leading to a shortage of supply.

Dairy farms in the European Union are currently facing three contributing factors simultaneously: weaker milk prices, rising feed costs and adverse weather conditions. Each of these factors on its own would slow down production, but together they explain why Europe is the hardest hit among the major exporters. Consequently, this combined pressure is having a direct impact on European milk production.