USDA Foreign Agricultural Service (FAS) alongside the European Commission released targeted market outlook updates mapping out a highly resilient yet shifting dairy and beef topography.
-
The Milk Supply Squeeze: Total EU milk production is forecasted to climb to 152.8 million metric tons. While the first half of the year recorded strong margins supported by stable raw milk prices and exceptional feed availability, a slowdown is unfolding. Declining farm-gate milk prices, alongside rising energy and fertilizer costs, are tightening profit margins for European dairy farmers.
-
The High-Value Cheese Shift: In response to tight margins, dairy processors are prioritizing high-value, shelf-stable commodities. Total EU-27 cheese production is projected to hit 11 million metric tons, climbing 0.8%. However, this increase comes at the expense of the production of butter, skim milk powder, and whole milk powder.
-
Contraction in Beef Infrastructure: Driven by a steadily declining regional cattle herd and high retail price indexes, European beef production is projected to contract by 2.6%. This domestic decline is prompting a localized rise in total beef imports to satisfy stable domestic per capita demand.
