Mmo Economic Board Meeting of 24092014 en

Milk Market Observatory
REP.Meb
Last update : 29.09.2014
MMO Economic Board
Meeting of 24 September 2014

o
The 3rd meeting of the Milk Market Observatory

economic board took place on 24 September 2014,
with the participation of experts from the member
organisations representing the various steps in the
milk supply chain: CEJA (young farmers), COPACOGECA (producers and cooperatives), ECVC (Via
Campesina), EMB (European Milk Board), EDA
(dairy industry), Eucolait (dairy trade) and
Eurocommerce (retail).
The meeting was opened with 2 presentations by

DG AGRI on the milk market situation and on the
short term outlook. The major part of the meeting
was dedicated to the assessment of the market
situation and perspectives with a special focus on
the Russian import ban and its impact on dairy
products.
Downward pressure on prices registered since

early 2014 has been exacerbated by the
introduction of the Russian ban (SMP -18.5%;
butter -9%; WMP -15%; Cheddar 8% and Edam 3%). Negotiations between processors and
retailers are going on in some MS and downward
price pressure is mounting. In some MS the
production of cheese for Russia has stopped and
been converted into SMP and butter. Product
prices seem to bottom out at the moment.
Farmers are not facing yet a severe drop in milk

price, except in some MS. It can take up to three
months like in France before milk prices adapt to
market conditions for dairy products. Forage
quality and quantity for the coming period are
good. Feed prices are on a downward trend.
Therefore, farmers may not reduce milk production
before the very end of the year when all farmers
might experience price drops. In MS where
production is over quota, a slowdown in milk
production could occur earlier in order for farmers
to limit their surplus levy bill. In some MS, farmers
have invested heavily and could face cash flow
difficulties. Only once facing these difficulties
farmers may cull cows to recover some cash
facilities.
In the draft short-term outlook prepared by the

1
Commission , EU milk collection is nevertheless
Publication foreseen the second week of October
expected to show less pronounced growth

percentages in the 2nd half of the year, compared
to the same period last year where significant
increases were registered. Some experts found the
assumptions (and results) of the short-term
outlook rather optimistic due to the time lag in
price transmission to farmers in some important
milk producing MS.
Consumption forecasts may seem inflated as they
include stock variation. However given the 2014
increase in milk collection and the difficulties met
on the exporting markets, more products are
expected to remain on the domestic market
(whether in the form of increased stocks or
consumption). Re-directing products, notably
cheese, and finding new customers cannot happen
from one day to the next.
The assessment of EU stock levels based on a
residual approach (production + imports
consumption and exports) showed that in July
2014 all dairy commodity stocks appeared rather
high because of high production. Stock levels for
SMP and cheese appear to be comparable to that
of the summer 2012. In 2012, stocks reduced
rapidly afterwards in the wake of the US drought.
Unlike SMP, butter stocks are assessed as being at
less worrying levels. Cheese stocks are expected to
get healthier given reduced cheese production in a
number of MS.
Oversupply in key producing regions of the world
persists. As prices are on a downward trend,
buyers are holding off purchasing decisions as long
as possible, depending on their stock position. For
the longer term, global exports are likely to
increase again, in line with demand.
o
The market review showed the need to make sure

that market signals reach all actors in the milk
supply chain, especially in today's oversupply
situation. Coming from high levels, prices have
been under pressure due to difficulties for the
market to absorb increased production in the
major milk producing regions of the world and this
has been exacerbated by the Russian import ban.
This downward trend could continue if production
does not slow down. The uptake of the measures
taken remains limited so far (with the exception of
PSA for cheese).
ANNEX 1
Milk Market Situation
European Commission
Milk Market Situation

Brussels, 24 September 2014
Following a data update, the figures shown in this

chart differ from those presented in the MMO
economic board meeting held on 24/09/2014
EU Productions
EU-28 Deliveries/Productions development
(Apr 2014 - Jul 2014 compared to Apr 2013 - Jul 2013)
EU-28 Deliveries/Productions development

(Jan - Jul 2014 compared to Jan - Jul 2013)
Cows' Milk
Collected
+ 5,8%
Cows' Milk
Collected
+ 5,8%
Fermented milk
- 2,7%
Fermented milk
- 2,4%
Evolution in %
Milk powder
cream,
Whole
Cheese
+ 1,8% milk powder
and partly
skimmed milk
powder
+ 7,0%
Evolution in %
Milk powder
cream, Whole
milk powder
and partly
skimmed milk
powder
+ 13,9%
Cheese
+ 2,3%
Skimmed-milk
powder
+ 21,7%
Skimmed-milk
powder
+ 20,0%
Total Butter
+ 2,4%
Total Butter
+ 2,9%
- 10%
- 5%
+ 0%
+ 5%
+ 10%
Rem : FR 2013-14 da ta not considered (except Milk)

DK 2014.Apr>Jul da ta estimated (except Mi lk)
+ 15%
+ 20%
+ 25%
+ 30%
Source : MS' Communications to Eurostat
- 10%
- 5%
+ 0%
+ 5%
+ 10%
Rem : FR 2013-14 da ta not considered (except Milk)

DK 2014.Apr>Jul da ta estimated (except Mi lk)
+ 15%
+ 20%
+ 25%
+ 30%
!!! Data from some Member States are confidential and are NOT included in this table !!!
24 September 2014
Following a data update, the

figures shown in this chart
differ from those presented
in the MMO economic board
meeting held on
24/09/2014
+3,4
+8,9
+2,9
+12,4
+3,3
-16% to -12%
-12% to -08%
-08% to -04%
-04% to +00%
+00% to +04%
+04% to +08%
+08% to +12%
+12% to +16%
n/a
+8,5
+7,1
+10,2
+7,5
+3,4
+7,9
+4,4
+5,9
-0,5
+1,1
+4,1
+2,3
+7,4
+5,4
+14,9
+5,1
+3,2
+3,3
+4,1
24 September 2014
+6,9
-4,8
+9,4

meeting held on
24/09/2014
+3,1
+8,8
+2,5
+12,5
+2,8
-20% to -15%
-15% to -10%
-10% to -05%
-05% to +00%
+00% to +03%
+03% to +07%
+07% to +09%
+09% to +20%
n/a
+9,6
+9,2
+8,8
+7,6
+2,6
+7,6
+4,3
+6,8
+0,7
+2,1
+3,3
+3,3
+7,1
+8,4
+16,2
+8,0
+3,6
+5,9
+4,7
+7,6
24 September 2014
-4,6
+12,3
EU - Cows' milk collected ( 30d ajusted months )

14000
2014
13000
1000 Tonnes
2013
12000
11000
2012
2011
Jan-Jul 2014/13 : +5,8%
10000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source : Estat - Newcronos
24 September 2014

meeting held on
24/09/2014
Last Update : Jan-Jul

Source: MS communications to Eurostat
EU Raw Milk Prices Evolution (up to July 14)
EUR/100 kg
50
48
46
44
42
40
38
36
34
32
30
28
26
Weighted EU Average (real fat content)
24
EU Milk Equivalent Price (based on EU SMP and Butter prices)
22
Milk Prices (LTO)
24 September 2014
Jan 14
Jan 13
Jan 12
Jan 11
Jan 10
Jan 09
Jan 08
Jan 07
Jan 06
Jan 05
Jan 04
Jan 03
Jan 02
Jan 01
20
Source :MS communications under reg. 562/2005 & 479/2010 + LTO : Land- en Tuinbouworganisatie Nederland (http://www.milkprices.nl/)
EU
MILK
PRICES
( Jul 2014 vs Jul 2013 )

Source : Member States (Reg. 479/2010)
54,6
60
55
46,9
50
30
25
in EUR/100 kg
26,1
28,9
35
29,3
32,0
32,3
32,4
33,3
33,9
34,0
34,1
40
34,3
35,1
35,3
36,5
36,9
37,1
37,2
37,3
37,9
38,2
38,9
45
39,5
41,2
41,7
42,4
Milk Price 2014
33,2
47,3
Milk Price 2013
20
15
10
5
0
CY
FI
MT EL DK
IT
NL UK AT SE EU DE FR LU ES
IE
BE
SI
HR CZ BG PT SK HU EE
PL
LV RO LT
Estimates for DK, IT, SE

NB: The above national price averages are of mixed nature, some relate to standardised milk, others to milk with real fat and protein
content, pending harmonisation under reg. 479/2010
Source: MS communications under Reg. 479//2010
24 September 2014
Weekly EU SMP Prices

Latest price : 221 EUR/100kg
450
Evolution compared to same period last year : -32%
350
300
EUR/100 kg
400
250
200
2011
24 September 2014
2012
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
150
2013
Source: MS communications under Regs. 562/2005 and 479/2010
EU S.M.P. Prices (up to 14.09.2014)

350
330
310
290
265
270
248
250
240
225
221
219
230
213
212
in EUR/100 kg
270
210
190
I.P
170
150
GB
CZ
IE
SK
PL
EU Avg.
BE
LV
DE
Source : Reg. (EC) No 479/2010 Article 2
Source: MS communications under reg. 479/2010
24 September 2014
Weekly EU BUTTER Prices

450
350
300
EUR/100 kg
400
250
200
2011
24 September 2014
2012
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
150
2013
10
EU Butter Prices (up to 14.09.2014)
450
431
400
374
345
334
330
350
319
311
309
301
298
290
300
250
I.P. = 221.75
EUR/100 kg
355
200
150
SK
LV
GB
PT
ES
CZ
IE
EU Avg.
DE
BE
PL
NL
Source : Reg. (EC) No 479/2010 Article 2
24 September 2014
Source: MS communications under reg. 479/2010
11
EU Quotations of Butter and SMP

(EU average based on MS communication and weighted by production)
440
420
400
380
Butter Intervention buying in price

SMP Intervention buying in price
BUTTER prices
SMP prices
360
in EUR/100 kg
340
320
311
300
280
260
240
221
220
200
180
160
140
Jan 03
Jan 04
Jan 05
Jan 06
Jan 07
Jan 08
Jan 09
Jan 10
Jan 11
Jan 12
Jan 13
Jan 14
Source: MS communications under reg. 562/2005 and 479/2010
24 September 2014
12
EU Dairy Quotations
(EU Average Prices based on MS communication and weighted by production)
440
420
BUTTER
400
SMP
380
WMP
360
CHEDDAR
320
300
280
260
in EUR/100 kg
340
240
220
200
180
160
Jan 14
Jan 13
Jan 12
Jan 11
Jan 10
Jan 09
Jan 08
Jan 07
Jan 06
Jan 05
Jan 04
Jan 03
140
Source: MS communications under reg. 562/2005 and 479/2010
24 September 2014
13
Weekly EU WMP Prices

450
350
300
EUR/100 kg
400
250
200
2011
24 September 2014
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
150
2014
14
Weekly EU CHEDDAR Prices
500
500
450
400
400
350
300
EUR/100 kg
450
350
300
250
250
200
200
2011
2012
2013
2014
2011
2012
2.013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
150
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
150
2.014
24 September 2014
15
EUR/100 kg
Weekly EU EDAM Prices
Weekly EU WheyPowder Prices

120
115
110
100
95
90
EUR/100 kg
105
85
80
75
2011
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
70
2014

24 September 2014
16
USD/EUR
US Dollar
1.2845
24 September 2014
Source: European Central Bank
17
EU/US/Oceania Quotations of SMP

6.000
Avg Oceania SMP quotation
5.500
Avg EU SMP internal Price

5.000
Avg US SMP quotation
Prices in USD/tonne
4.500
4.000
3.500
2.980
2.911
2.813
3.000
2.500
2.000
1.500
Source: MS communications under regs. 562/2005 and 479/2010 & USDA market news
24 September 2014
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
Sep 10
Jun 10
Mar 10
Dec 09
Sep 09
Jun 09
Mar 09
Dec 08
Sep 08
Jun 08
Mar 08
Dec 07
Sep 07
Jun 07
1.000
18
EU/US/Oceania Quotations of WMP

6.000
5.500
5.000
Prices in USD/tonne
4.500
4.320
4.000
3.500
3.390
3.000
2.850
2.500
Avg Oceania WMP quotation

Avg EU WM P internal Price
2.000
Avg US WM P quotation
1.500
24 September 2014
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
Sep 10
Jun 10
Mar 10
Dec 09
Sep 09
Jun 09
Mar 09
Dec 08
Sep 08
Jun 08
Mar 08
Dec 07
Sep 07
Jun 07
1.000
19
EU/US/Oceania Quotations of Butter

7.000
6.660
6.500
6.000
Prices in USD/tonne
5.500
5.000
4.500
4.050
4.000
3.500
3.000
2.975
Avg Oceania Butter quotation
2.500
Avg EU Butter internal Price
2.000
Avg US Butter quotation
1.500
24 September 2014
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
Sep 10
Jun 10
Mar 10
Dec 09
Sep 09
Jun 09
Mar 09
Dec 08
Sep 08
Jun 08
Mar 08
Dec 07
Sep 07
Jun 07
1.000
20
EU/US/Oceania Quotations of Cheddar

6.000
5.500
5.310
5.000
4.743
Prices in USD/tonne
4.500
4.000
3.950
3.500
3.000
Avg OceaniaCheddar quotation
Avg EU Cheddar internal Price
2.500
Avg US Cheddar quotation

2.000
1.500
24 September 2014
Sep 14
Jun 14
Mar 14
Dec 13
Sep 13
Jun 13
Mar 13
Dec 12
Sep 12
Jun 12
Mar 12
Dec 11
Sep 11
Jun 11
Mar 11
Dec 10
Sep 10
Jun 10
Mar 10
Dec 09
Sep 09
Jun 09
Mar 09
Dec 08
Sep 08
Jun 08
Mar 08
Dec 07
Sep 07
Jun 07
1.000
21
BUTTER & Butteroil

Exports
EU-28 (up to Jul)

New Zealand (up to Jul)
Australia (up to Jul)
United States (up to Jul)
Argentina (up to Jul)
350 000
303 176
300 000
266 731
250 000
200 000
150 000
72 869
92 258
42 068
25 293
57 283
8 659
24 212
100 000
7 323
50 000
0
2013
24 September 2014
2014
22
EU-28 (up to Jul)

SMP Exports
450 000
382 497
317 553
239 274
360 434
400 000
350 000
300 000
225 113
250 000
202 422
200 000
150 000
91 458
63 651
100 000
.
10 820
9 009
50 000
2013
24 September 2014
2014
23
WMP Exports
EU-28 (up to Jul)

843 634
706 039
900 000
800 000
700 000
600 000
400 000
81 906
36 202
300 000
48 686
84 201
18 073
47 718
216 897
245 635
500 000
200 000
100 000
0
2013
24 September 2014
2014
24
EU-28 (up to Jul)

CHEESE
Exports
500 000
453 472
452 931
450 000
400 000
350 000
300 000
176 830
250 000
200 000
158 690
87 867
172 296
98 965
232 039
150 000
100 000
28 050
27 730
50 000
0
2013
24 September 2014
2014
25
EU-28 Exports (1/2)

Source : Eurostat (COMEXT)
BUTTER exports
BUTTER exports
1000 tonnes
1000 Tonnes
14
164
180
2014
160
140
118
119
12
126
120
94
100
10
2013
102
102
80
Jan-Jul 2014 exports compared to 2013 : + 28%
60
40
2
20
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
SMP exports
1000 Tonnes
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
SMP exports
1000 tonnes
70
600
515
520
500
60
50
407
376
400
2014
2013
300
200
200
40
229
30
176
20
100
10
2007
24 September 2014
2008
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
26
EU-28 Exports (2/2)

WMP exports
1000 Tonnes
483
500
400
WMP exports
1000 tonnes
45
458
445
40
388
366
386
374
35
2013
30
2014
300
25
20
200
15
100
10
5
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
CHEESE exports
1000 Tonnes
768
700
667
589
600
547
Jun
Jul
Aug
Sep
Oct
Nov
Dec
CHEESE exports
1000 tonnes
800
May
72
787
2013
2014
70
673
68
569
66
500
64
400
62
300
60
200
58
100
56
0
2007
24 September 2014
2008
2009
2010
2011
2012
2013
54
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
27
BUTTER + Butteroil
Imports
EU-28 (up to Jul)

Russia (up to Apr)
China (up to Jul)
Mexico (up to Jun)
70 000
60 499
60 000
50 000
41 225
37 323
32 124
28 847
40 000
27 722 28 663
30 000
20 000
9 884
10 917
7 524
10 000
0
2013
24 September 2014
2014
28
EU-28 (up to Jul)

Mexico (up to Jun)
Russia (up to Apr)
China (up to Jul)
Japan (up to Jul)
SMP Imports
200 000
174 670
180 000
160 000
140 000
103 914
100 701
120 000
100 933
100 000
80 000
60 000
2 658
7 510
20 786
7 137
578
23 134
40 000
20 000
0
2013
24 September 2014
2014
29
EU-28 (up to Jul)

Russia (up to Apr)
China (up to Jul)
Mexico (up to Jun)
WMP Imports
600 000
569 743
500 000
400 000
340 189
300 000
200 000
100 000
2 318
5 326 7 632
549
183
3 350
3 271 2 904
0
2013
24 September 2014
2014
30
EU-28 (up to Jul)

Russia (up to Apr)
China (up to Jul)
Japan (up to Jul)
CHEESE
Imports
160 000
138 721
131 964
140 000
120 000
101 229
95 983
100 000
81 857
79 576
80 000
50 091
43 590
42 061
60 000
40 000
26 972
20 000
2013
24 September 2014
2014
31
Main Dairy Importers (Butter + Butteroil

Russia
1/2)
1000 tonnes
1000 Tonnes
14
Jan-Apr 2014 compared to 2013 : + 28%
12
125
2014
2013
10
100
8
75
50
73
80
2007
2008
54
25
90
72
73
68
2010
2011
2012
4
2
0
2009
2013
0
Jan
China
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
1000 tonnes
1000 Tonnes
16
Jan-Jul 2014 compared to 2013 : + 118%
14
125
12
2011
100
10
2014
75
2013
50
25
14
13
2007
2008
28
23
2009
2010
36
48
52
2012
2013
4
2
0
2011
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
32
Main Dairy Importers
(Butter + Butteroil
Mexico
2/2)
Jan-Jun 2014 compared to 2013 : - 62%

1000 tonnes
2014
1000 Tonnes
125
100
75
4
2013
50
25
59
41
60
40
29
30
2011
2012
2014
40
2
1
0
2007
2008
2009
2010
2013
0
Jan
Iran
Feb
Mar
Apr
May
1000 tonnes
1000 Tonnes
Jun
Jul
Aug
Sep
Oct
Nov
Dec

10
2014
125
100
75
2013
50
25
33
55
56
52
45
52
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
33
Main Dairy Importers (S.M.P. - 1/2)

China
1000 tonnes
40
1000 Tonnes

35
250
30
2014
200
2013
25
150
20
235
100
50
40
55
70
2007
2008
2009
89
130
15
168
10
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan-Jun 2014 compared to 2013 : + 0%
Mexico
1000 tonnes
40
1000 Tonnes

35
250
30
200
25
2014
2013
150
100
50
121
152
165
155
194
236
20
198
15
10
5
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
34
Main Dairy Importers (S.M.P. 2/2)

Indonesia
Indonesia
1000 Tonnes
1000 tonnes
1000 tonnes
25
2014
1000 Tonnes
Jan-May 2014 compared to 2013 : + 4%
Jan-May 2014 compared to 2013 : + 4%

20
175
16
14
250
150
15 12
125
200
100
150
75
50
100
18
91
77
104
132
128
136
132
128
136
91
77
2007
2008
2009
2010
2011
2012
2013
2007
2008
2009
2010
2011
2012
2013
10
10 8
2010
155
25
50
0
104
2013
2009
2014
155
6
5
4
2
0
Jan
Feb
Algeria
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan-Apr 2014 compared to 2013 : - 8% 1000 tonnes

1000 Tonnes
25
Jan-Apr 2014 compared to 2013 : - 8%
250
20
200
2014
15
150
10
100
50
91
105
93
98
129
112
120
2013
2007
2008
2009
2010
2011
2012
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
35
Main Dairy Importers (W.M.P.
1/2)
China
1000 tonnes
140
1000 Tonnes

120
700
100
600
500
80
400
619
300
200
100
326
320
60
2013
2014
406
40
177
58
46
2007
2008
20
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Algeria
1000 tonnes
60
1000 Tonnes

50
350
300
40
250
30
200
150
100
160
153
200
167
204
188
2013
20
2014
142
50
10
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
36
Main Dairy Importers (W.M.P.

Venezuela
2/2)
2013compared to 2013 : + 50%

Jan-Jun 2014
1000 tonnes
1000 Tonnes
60
50
350
300
40
250
200
30
150
243
100
50
216
215
110
51
170
10
0
2007
2008
2009
2010
20
2013
106
2011
2012
2014
2013
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Singapore
Oct
Nov
Dec
1000 tonnes
1000 Tonnes
60

50
350
300
40
250
200
30
150
100
50
20
61
73
74
83
81
74
90
2007
2008
2009
2010
2011
2012
2013
2013
2014
10
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
37
Main Dairy Importers (Cheese 1/2)

Russia
1000 tonnes
35
1000 Tonnes
Jan-Apr 2014 compared to 2013 : - 5%
2013
30
350
25
300
2014
250
200
150
100
234
248
294
296
316
20
327
15
229
10
50
5
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Japan
Oct
Nov
Dec
1000 tonnes
35
1000 Tonnes
Jan-Jul 2014 compared to 2013 : - 5%

30
350
25
300
2013
250
20
2014
200
150
100
15
225
187
184
199
215
2008
2009
2010
2011
235
2012
236
10
50
5
0
2007
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
38
Main Dairy Importers (Cheese 2/2)

United States
1000 tonnes
25
1000 Tonnes
20
350
300
2013
15
2014
250
200
10
150
200
100
171
162
138
143
154
148
50
0
2007
2008
2009
2010
2011
2012
2013
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Mexico
Oct
Nov
Dec
1000 tonnes
25
1000 Tonnes

20
350
300
15
250
200
10
150
2013
100
50
86
68
73
80
78
89
2007
2008
2009
2010
2011
2012
2014
103
2013
0
Jan
24 September 2014
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
39
Adjusted U.S. milk production

(months of constant length)
8.200
8.000
7.800
7.400
7.200
in tonnes
7.600
Jan-Jul 2014 vs 2013 : + 1.7% (real monthly production)
2011
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
7.000
2014
Source:USDA
24 September 2014
40
Australian milk production

1,200
Jul-Jun 2013/14 compared to 2012/13 : - 03%
1,100
,900
in tonnes
1,000
,800
,700
,600
2011/12
24 September 2014
2012/13
2013/14
Jun
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
Aug
Jul
,500
2014/15
Source: Dairy Australia
41
NZ milk production
4 000
Jun-Jun 2014/15 compared to 2013/14 : + 11%
3 500
3 000
2 500
1 500
1 000
in tonnes
2 000
500
2011/12
2012/13
2013/14
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
2014/15
Source: DCANZ - Fonterra

24 September 2014
42
Results of the GDT event 124 of 16.09.2014

% change by contract from previous
auction
Prices
in US$/t
AMF
Butter
BMP
Cheeses
MPC70
Rennet Casein
Lactose
SMP
WMP
Oct-14
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
2 532
n.a.
Nov-14
3 234
2 645
3 130
3 056
n.a.
8 271
n.a.
2 601
2 670
Dec-14
3 251
2 700
3 115
3 057
n.a.
8 404
n.a.
2 660
2 696
Jan-15
Feb-15
3 301
2 706
3 265
3 122
n.a.
8 435
n.a.
2 595
2 694
3 313
2 895
n.a.
n.a.
n.a.
n.a.
n.a.
2 603
2 723
Mar-15
3 394
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
2 828
2 873
Weighted
average
price
% change
3 264 - 2.9%
2 698 - 2.0%
3 140 - 1.1%
3 077 - 6.0%
n.a.
8 343 + 1.4%
n.a.
2 619 + 0.7%
2 692 + 0.7%
Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
- 6.5%
- 2.3%
- 3.2%
- 2.9%
- 3.9%
- 4.1%
+ 3.1%
- 4.1%
- 10.1%
- 6.2%
+ 3.9%
- 8.0%
- 8.8%
- 6.7%
- 6.5%
- 4.8%
+ 1.2%
+ 0.7%
+ 2.7%
+ 3.3%
+ 1.4%
- 3.3%
- 6.2%
- 10.4%
+ 1.9%
+ 1.2%
- 1.0%
- 4.2%
- 0.5%
Source : GlobalDairyTrade (http://www.globaldairytrade.info/)
1=
16 Sep 2014
in /t
AMF
Butter
BMP
Cheese
MPC70
Rennet Casein
Lactose
SMP
WMP
24 September 2014
Oct-14
Nov-14
1.2929 $ (ECB rate)
Dec-14
Jan-15
Feb-15
Mar-15
Weighted
average price
2 501
2 515
2 553
2 562
2 625
2 525
2 046
2 088
2 093
2 239
2 086
2 421
2 409
2 525
2 429
2 364
2 364
2 414 #VALUE! #VALUE!
2 380
#VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
6 397
6 500
6 524 #VALUE! #VALUE!
6 453
6 367
1 958
2 012
2 058
2 007
2 013
2 187
2 026
2 065
2 085
2 084
2 106
2 222
2 082
43
ANNEX 2
Draft short-term
prospects for EU dairy
markets
European Commission
Draft shortterm prospects

for EU dairy
markets
Milk market observatory
24 September 2014
Sophie Hlaine
European Commission
Outline
Which market signals are sent to farmers?
The EU milk collection in the next months?
2015 milk collection
The balance sheets
The next STO is to be published
the second week of October
2
With the exception of certain MS, farmers do

not face yet a drop in the milk price
Note: The farm gate milk price is expressed in real fat content
Source: DG AGRI estimates based on MS notifications
No break in milk collection expected before

the very end of the year
13 500
35%
2014 forecast
13 000
'14/13
'14/12
30%
2011
2012
25%
2013
12 000
2014
11 500
15%
11 000
10 500
20%
5.0%
5.0%
6.4%
10%
7.6%
4.6%
4.7%
4.6%
5%
3.3%
1.3%
10 000
2014 change
cow's milk delivered ('000 t)
12 500
0.1%
0%
-0.6% -0.8%
9 500
-5%
9 000
-10%
Source: DG AGRI (Work in progress)
A bigger break to be expected in the countries

which might produce above quota?
2 900
1 150
DE
2 800
NL
1 100
2 700
11/12
2 600
1 050
12/13
2 500
2 400
2 300
13/14
1 000
14/15
950
900
480
600
440
500
420
400
mar
feb
jan
dec
nov
oct
DK
460
700
sep
aug
jul
jun
apr
IE
800
may
900
mar
feb
jan
dec
nov
oct
sep
aug
jul
jun
may
apr
2 200
mar
feb
jan
dec
oct
sep
aug
jul
jun
nov
Unit: 1000 tonnes

Source: Eurostat and DG AGRI forecast from
August 2014 (September for NL) (Work in progress)
apr
mar
feb
jan
dec
nov
oct
sep
aug
jul
360
jun
100
may
380
apr
200
may
400
300
210
Which magnitude of the

decrease further to the
embargo?
FI
200
190
180
170
160
PL
feb
mar
feb
mar
sep
aug
jul
jan
14/15
jan
750
dec
140
dec
13/14
nov
800
nov
160
nov
12/13
oct
850
oct
11/12
oct
900
jun
150
apr
950
may
1 000
LT
120
100
80
mar
70
sep
aug
jul
jun
may
60
apr
feb
jan
dec
nov
oct
sep
aug
jul
jun
may
apr
700
EE
65
90
60
LV
80
55
70
50
60
45
50
mar
mar
feb
jan
dec
sep
aug
jul
jun
may
40
apr
Unit: 1000 tonnes

August 2014 (Work in progress)
feb
jan
dec
nov
oct
sep
aug
jul
jun
may
apr
40
What about the other Member States?

2 400
FR
2 300
560
ES
540
2 200
520
2 100
11/12
2 000
500
12/13
1 900
480
13/14
1 800
460
14/15
1 700
440
1 600
420
mar
feb
jan
dec
nov
nov
sep
aug
jul
jun
1 500
oct
IT
900
may
apr
mar
feb
jan
dec
nov
400
oct
950
oct
sep
aug
jul
jun
may
apr
1 500
UK
1 400
1 300
850
1 200
800
1 100
750
1 000
900
mar
feb
jan
dec
sep
aug
jul
jun
apr
mar
800
may
Unit: 1000 tonnes

August 2014 (Work in progress)
feb
jan
dec
nov
oct
sep
aug
jul
jun
may
apr
700
Milk collection in 2015?

7%
6%
5%
4%
3.4%
3%
2%
1%
0%
1.6%
-1%
-2%
-3%
2013/2012
Source: DG AGRI forecast (Work in progress)
2014/2013
8
2015/2014
Which redirection
of exports?
Cheese
2014
EU Exports in 1000 tonnes
Jan-July
known
Change (1000 t)
2014 2013
Aug-Dec Year
Janforecast forecast July
Change (1000 t)
2015 2014
AugDec
Year
JanJuly
AugDec
Year
Total
453
250
703
+1
-84
-84
-98
+130
+32
Russia
130
130
-14
-113
-127
-130
+100
-30
Other
323
250
573
+15
+29
+44
+32
+30
+62
Total
94
37
131
+20
-5
+15
-13
+23
+10
Russia
24
24
+5
-18
-13
-24
+15
-9
Other
71
37
108
+14
+13
+28
+11
+8
+19
Total
383
185
568
+144
+18
+162
+37
+43
+80
Russia
+1
-13
-12
-9
+10
+1
Other
374
185
559
+144
+30
+174
+46
+33
+79
WMP
Total
246
169
415
+29
+12
+41
+7
+2
+9
FDP
Total
421
243
664
+70
+16
+87
+10
+57
+67
Russia
35
35
+8
-22
-14
-35
+20
-15
Other
386
243
630
+62
+38
+100
+45
+37
+81
Butter
SMP
Source: Eurostat Comext for Jan- July and DG

AGRI forecast for Aug-Dec (Work in progress)
The use of milk
Milk col.
(million t)
Jan-July*
2014/13
Aug-Dec f
2014/13
2014 f
2014/13 f
2015/14 f
+5.4%
+0.7%
146.1
+3.4%
+1.6%
CHEESE
Prod.
(1000 t)
Exports
+2.3%
+0.7%
9 457
+1.7%
+1%
0%
-25%
703
-11%
+5%
17.4
+2.6%
+0.5%
(1000 t)
Dom. Cons.**
(kg/cap)
BUTTER
Prod.
(1000 t)
Exports
+2.9%
+6.9%
2 222
+4.5%
+2%
+26%
-11%
131
+13%
+8%
4.2
+4.6%
+1.4%
(1000 t)
Dom. Cons.**
(kg/cap)
FRESH DAIRY PRODUCTS

Prod.
(1000 t)
Exports
+0.3%
+0.3%
47 186
+0.3%
+0.5%
+20%
+7%
664
+15%
+10%
91.3
-0.1%
+0.2%
(1000 t)
Dom. Cons.**
(kg/cap)
Note: * Jan-July change versus 2013 based on Eurostat figures excluding FR and estimating DK (except for milk)
** Including change in stocks
10
The use of milk
Milk col.
(million t)
Jan-July*
2014/13
Aug-Dec
2014/13
2014
2014/13
2015/14
+5.4%
+0.7%
146.1
+3.4%
+1.6%
SMP
Prod.
(1000 t)
Exports
(1000 t)
Dom. use**
+20%
+15%
1 301
+18%
+8%
+60%
+11%
568
+40%
+14%
734
+5%
+3%
(1000 t)
WMP
Prod.
(1000 t)
Exports
(1000 t)
Dom. use**
+14%
+6%
778
+11%
+2%
+13%
+8%
415
+11%
+2%
364
+10%
+3%
(1000 t)
Note: * Jan-July change versus 2013 based on Eurostat figures excluding FR and estimating DK (except for milk)
** Including change in stocks
11
For further information

STO
http://ec.europa.eu/agriculture/markets-and-prices/short-termoutlook/index_en.htm
MTO
http://ec.europa.eu/agriculture/markets-and-prices/medium-termoutlook/index_en.htm
OECD-FAO Outlook
http://www.oecd.org/site/oecd-faoagriculturaloutlook/
http://www.compareyourcountry.org/chart?cr=ch&cr1=mk&lg=en&project=a
gricultural-outlook&page=1
Thank you
12
ANNEX 3
Dairy market update

24 September 2014
COPA-COGECA
Dairy market update 24 September 2014

Milk supply
Thanks to good climatic conditions, EU milk production has increased year-on-year (+5.4%, first seven
months)), US (+2.9% in August) and New Zealand (+16%, first seven months)). But if we look back at
the last two years, the production increases have been moderate (New Zealand +1.5%, EU +3.8%).
Milk production increases have become more moderate, but deliveries are still up year-on-year in
Germany (+2.4%), France (+6.2%, ) and UK (+6.9%, August). In the Netherlands, August deliveries
were down -0.3% compared to the same month of 2013. Average milk production increase in the EU
may end around 4% for the calendar year 2014. For next year, a return to the long-term trend of 2%
may be expected (which is the long-term global consumption growth), but with a wide variety of
trends across the EU.
World Market
Since April, the market was impacted by the uncertainty about the Chinese imports. However, the EU
statistics still show a strong demand from China. This may be related to new Chinese regulations,
requiring foreign companies to get consent for importation. The Russian embargo came on top of
that. Price levels in the international market are now back to the level of the summer of 2012.
Volatility is clearly on the agenda because of deregulation (CAP) and greater market transparency. As
we may expect, grassland conditions in the main exporting nations (EU, US, NZ) are good for milk
production going forward into 2015.
New Zealand
Fonterra has lowered payment forecasts from a record 8.50 NZD per kg of dry matter to 5.60 NZD,
which would be -34%. The last GlobalDairyTrade auction (September 16) showed stability, with no
change to the main GDT index, after many months of declining prices.
At GlobalDairyTrade in September 2013, whole milk powder was sold at prices around 5,100 USD per
tonne but at the same time this year the price was 2,700 USD. This is also the price level that
characterizes the market until March 2015 and has consequences for the futures market. At the
beginning of August future prices may have increased, but the GDT auction results have been used to
close the futures offered by NZX. Therefore the futures market has become very flat at levels just
below 3,000 USD for contracts well into 2015.
USA
In the USA, the stocks were low at the beginning of 2014, and milk production growth was limited.
Record milk prices, along with lower feed costs, have resulted in very favourable margins for dairy
producers to increase U.S. milk production. In August 2014, the increase was 2.6%, but the average
production increase during the first seven months of 2014 was 1.9%. As a result, prices of butter and
cheese are well above the world market including EU prices. The average farm milk prices were 27%
above the level of 2013. As a result, the US is now much less present on the world market. The
current forecast for the 2014 milk price is a record high, but the forecast for 2015 has already been
reduced by a third.
Note: This document should not be regarded as an official position of COPA-COGECA but as a factual
document.
The graph below shows that the Chicago futures for Class III milk January 2015 contracts market is
still firm (USD18.83 per 100 cwt, which is about 31.4 per 100 kg at 3.5% fat)
European Union
We know that the growth of the EU market is limited at best, so production increases need to be
exported. This has also happened as we can take from the statistics published by the European
Commission and milk prices remained at a relative high level.
However, the EU was hit by the Russian boycott on 7 August. Approximately 260,000 tons of cheese
and 40,000 tonnes of butter must now be redirected. This constitutes about 1.5% of the EU milk in
terms of equivalent production. Cheese production has already been reduced in several countries.
Prices paid in markets were below 3.00 per kg. We need to increase exports so we need to find new
outlets. A question is: will the Russians still consume cheeses and is the international dairy market
after all a zero sum game? Annual demand growth is estimated at 2.0% per year by FAO/OECD,
which is more than the direct impact of the Russians sanctions on the EU-sector. However, milk
prices are now under pressure.
The impact would have been bigger had the embargo struck in April-May, at our milk production
peak. Also the lower euro-dollar exchange rate of recent weeks has supported EU exports.
At current cheese and butter prices, milk prices would be 30-32 eurocents per kg. For example, the
so-called IFE raw material value based on butter and skimmed milk powder quotations in the EU in
August was down to 32.4 cents per kg (4% fat).
The latest market information shows that the prices for fresh dairy have increased somewhat from
the late lows, with cream and skimmed milk concentrates on the up. However, young cheese is sold
at prices as low as 2.75 per kg.
The European Union has responded well to the Russian boycott with private storage support for
SMP, butter and cheeses. Even where the effect in volumes seems limited, this may have helped to
stabilise markets and we now seem to have reached the bottom in the global and European market.
However, the Commission has repealed the private storage scheme for cheeses on 22 September.
document.
This may cause new uncertainty in the market. Many operators are still looking for ways to cope with
the effects of the Russian boycott.
Milk prices
The LTO International Milk Prices Comparison shows an average milk prices per standard milk (4.2%
fat) of 38.65 euro per 100 kg for July 2014 (see graph below).
Graph: the average paid milk price per kg standard milk (4.2%) of July 2014 was 0.66 above the
same month of 2013. But then the trend was up, now the trend is down. Source: LTO Milkprices.
The table below provides some information about recent milk price developments, taken from LTO
Milkprices.
Milcobel
Alois Mller,
Leppersdorf
DMK
Arla Foods DK
Hmeenlinnan O.
Bongrain (Basse
Normandie)
Danone (Pas de Calais)
Lactalis (Pays de la Loire)
Sodiaal Union
Dairy Crest (Davidstow)
First Milk
(compositional)
Glanbia
Most recent milk price change (eurocent)

Aug
Sept
Oct
2014 Cumulative
-1,0
-6,0
including August
-1,0
-4,5
including August
0
-1,2
-1,5
-1.25ppl
-1.1 ppl
-0.5 ppl
-2
-1,75ppl
-3.0 ppl
-3,0
-4,6
including August
including September
-2.85 ppl
-5.9 ppl
Including October
Including October.
Since April, price drop
was 7.4 ppl
Including August
-6
document.
Kerry Agribusiness
Granarolo (North)
DOC Cheese
Royal FrieslandCampina
USA Class III
Fonterra
-2
0
0
-0,25
0
-3,5
-11
including September
0,25
-1,75
-6
including September
in US$/cwt average Class III price January-August 2014: 27% higher
than in 2013
Cash pay-out (milk price + dividend), 2013/14: 8,50, 2014/15: 5,60 (34%)
From this table, the following conclusions may be drawn:

-
The average 2014 advance payments by Glanbia, Kerry and Milcobel will be below the
average level of 2013, even if their payments would stay level for the rest of this year.
If the milk price of October, November and December is 1 eurocent per kg below the level in
the same month of 2013, then Alois Mllers payments (Leppersdorf) will also end below the
2013 average
We expect the average 2014 payments of the other dairies in the comparison to be above
the average of 2013 because of the relatively high milk prices of the beginning of 2014. The
weaker euro is also helpful for the dairies in the Eurozone.
For Granarolo (Italy), the average 2014 milk price will be 2 per kg above the average of
2013, thanks to a contract.
For the French dairies, it is a bit more difficult to make predictions, but also in France the
average 2014 milk prices will be above the 2013 level. In the first half of 2014, the prices
level was 4-5 eurocent per kg higher than in 2013
In Great Britain, the official July price was 32.41 ppl. For the UK, the average was 31.79 ppl.
Arla dropped the milk prices 4,68ppl (liquid) from April to October. Muller Wiseman Dairies
Milk Group dropped the price 3.50 ppl between April and October. Significant price cuts
have been announced by milk buyers which are not reflected in these prices.
It is interesting to note the rising milk prices in the USA, while Fonterra is lowering its
forecast considerably (-34%).
In Baltic States, at the moment, prices range from 18-23.5 /100 kg, 30-40% drop compared to the
beginning of the year. There is still downward pressure.
For Lithuania, below some examples of prices paid to coops/farmers (from contracts):
Period
2013.08.01-31
2013.09.01-30
2013.10.01-31
2013.11.01-30
2013.12.01-31
2014.01.01-31
2014.02.01-28
2014.03.01-31
Price of raw milk, without VAT, LTL/t (with/without

transport)
Company A to cooperative
1120/1090
1180/1150
1210/1180
1160/1130
1180/1150
1180/1150
1230/1200
1170/1140
Receiver
(farmer/coop.)
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
document.
2014.04.01-30
1030/1000
2014.05.01-31
860/830
2014.06.01-30
830/800
2014.07.01-31
860/830
2014.08.01-31
870/840
2014.09.01-30
695/665
Comparing 2013.09 with 2014.09, the price dropped down by 41 proc.
Company B to cooperative
2013.08.01-31
1130/1090
2013.09.01-30
1190/1150
2013.10.01-31
1230/1190
2013.11.01-30
1200/1160
2013.12.01-31
1195/1155
2014.01.01-31
1210/1170
2014.02.01-28
1240/1200
2014.03.01-31
1180/1140
2014.04.01-30
1080/1040
2014.05.01-31
1040 (for the first 500 t)/1000 (870/830 for the next
volumes)
2014.06.01-30
850/810
2014.07.01-31
880/840
2014.08.01-31
890/850
2014.09.01-30
740/700
Cooperative to farmer
2014.01.01-30
1060
2014.02.01-15
1130
2014.02.16-28
1110
2014.03.01-31
1130
2014.04.01-15
1130
2014.04.16-30
1070
2014.05.01-15
990
2014.05.16-31
860
2014.06.01-15
860
2014.06.16-30
840
2014.07.01-15
890
2014.07.16-31
870
2014.08.01-31
870
Company C to cooperative
2013.12.011175
2014.01.31
2014.02.01-28
1220
2014.03.01-31
1190
2014.04.01-30
1020
2014.05.01-31
830
2014.06.01-30
810
2014.07.01-31
880
2014.08.01-31
860
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
document.
Company D to cooperative
2014.01.01-31
1250
2014.02.01-28
1260
2014.03.01-31
1250
2014.05.01-31
850
2014.06.01-30
830
2014.07.01-31
870
2014.08.01-31
910
2014.09.01-30
660
Company E to cooperative
2014.04.16
870/820
(atbuline data,
informacija gauta
04.28)
2014.08.15
780/730
Company F to cooperative
2014.08.01-31
920
2014.09.01-30
670
Company G to cooperative
2014.08.01-15
910
2014.08.16-31
810
2014.09.01-30
660
Company H to cooperative
2014.01.01-30
1090
2014.02.01-28
1110
2014.03.01-31
1110
2014.04.01-30
970
2014.05.01-15
880
2014.05.16-31
900
2014.06.01-31
840
2014.07.01-15
840
2014.07.16-31
860
2014.08.01-15
770
2014.08.16-31
670
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
Cooperative
In Hungary, the price of raw milk moves around 30-32 /100 kg. After contracts finish in October 2014,
significant price drops are expected.
Feed prices
There is a lot of pressure on the price for feed ingredients in the world market. The US expects record
harvests for soyabean and wheat in 2014. In northwest Europe, quotations for wheat are
approaching 1.50 per kg. The global grain and oilseed markets moved down further again last week
after the latest USDA world supply and demand estimates were revealed. While expectations are for
further increases to both global supply and demand, the level of demand is not large enough to
document.
offset the record crops. Consequently, end-season stock projections were increased for wheat, maize
and soybeans and prices have declined in response. This may indicate much lower concentrate prices
for dairy towards the end of 2014. This added to the reasonable weather conditions in many regions
(early spring, recent rain fall in parts of Europe, including Brussels) may help dairy farmers to reduce
costs of production this year and the first months of 2015.
Conclusions
-
Certain member states are struggling with the effects of the Russian boycott and this is
impacting on the whole of the internal European market
Milk prices are under pressure
The European Union has responded well with private storage support for SMP, butter and
cheeses.
Even where the effect in volumes seems limited, this may have helped to stabilise markets
and we now seem to have reached the bottom in the global and European market.
The situation in the US is very different from ours, with prices for cheeses and butter
reaching record levels. The US is now much less competitive on the world market. For how
long this will last, we dont know. US milk production was up 2.6% in August year-on-year,
which is more than earlier this year.
However, the Commission has repealed the private storage scheme for cheeses on 22
September. This may cause new uncertainty in the market. Many operators are still looking
for ways to cope with the effects of the Russian boycott.
Because of the low milk prices in H1 2013 and much higher milk prices in H1 2014, we expect
average 2014 EU milk prices still to be above the average of 2013 for most dairies. But the
market trend is now downwards, and the situation in 2015 will be very different from the
start!
falling feed prices will not be enough to compensate farmers for lower milk prices
Copa-Cogeca delegation to the Milk Market Observatory meeting
document.
ANNEX 4
EU dairy products
monthly stock situation
EDA
EU dairy products monthly

stock situation
Milk Market Observatory
Economic Board
Sept 24th, 2014
Grard CALBRIX
Director Economic Affairs
ATLA
Methodology
For each dairy product, these stock estimates are based on the equation:
Stock variation = EU production + EU import EU internal consumption EU exports
ZMB balance sheets and forecasts have been used as references for :
End of year stocks levels in 2012 and 2013
Yearly consumption levels in 2012, 2013 and 2014 forecast
Monthly production statistics are based on ZMB Dairy World publications.

Exports and imports figures are based on MMO website figures.
The initial stocks entered in the model for end of 2011 are :
SMP: 152 000 t
Butter: 80 000 t
Cheese: 200 000 t (arbitrary basis)
The qualification of stock levels (green, orange or red) is based on the EDA
analysts personal views and past market observation.
ANNEX 5
Perspectives from the

Dairy Trade
Eucolait
Perspectives from the Dairy

Trade
Milk Market Observatory Meeting
24 September 2014
Outline
Global Supply
Global Exports
Global Demand
Global Stocks
Conclusions
Global Supply
Comparing milk production in 2014 with 2013
January - September (with partial extrapolation for Q3 - 2014 data)
Argentina
Uruguay
New Zealand
Australia
EU
USA
2% GROWTH RATE
Combined evolution
-1000
1000
2000
3000
000 tonnes
4000
5000
6000
7000
8000
9000
Global Supply
Comparing 2014 milk production with 2013 for the major dairy exporting countries
-6,9% in Q3
Argentina
- 5,7% in Q3
Uruguay
+ 6,3 % in Q3
New Zealand
+ 1,5 % in Q3
Australia
+4,1 % in Q3
EU
+ 3,5 % in Q3
USA
+ 3,5 % in Q3
Combined evolution
EU exports to Russia in milk equiv.
2% GROWTH RATE
-500
500
1000
Q3 (extrapolated from most recent data)
1500
Q2
2000
Q1
2500
000 tonnes
3000
Global Supply
Oversupply in key producing regions persists
Somewhat slower combined growth expected
in Q3 versus the first half of the year, US being
the exception
Russian ban has potential to worsen global
oversupply.
EU Supply
EU production was up 5% during first half of
2014
Conditions remain favourable: high milk prices
(lagging market reality), lower feed prices, low
energy costs and favourable weather
No signs of lower milk production
US Supply
Milk production year to date:
June 2014: +2,2% versus June 2013
July 2014: + 3,9% versus July 2013
August 2014: +2,5% versus August 2013
Outlook for rest of 2014

September growth likely to be similar to Julys
Production conditions remain very favourable
Domestic consumption appears to have been
growing at a pace well above 1% per year.
New Zealand supply

Milk Production
DCANZ has reported until June
April-June 2014 is up 29% from April-June 2013 (but
down 10% from April-June 2012)
2013-14 season: +9%
Outlook for new season

Growth rate appears to be slowing down
Fonterra collection in July + 8,3% and in August + 5 %
Fonterra forecast for 2014/15 season revised down to
+ 2% due to effect of lower milk price
Australia supply
Milk Production
2013/14 season finished on par with 2012/13
after strong second half
July 2014 production: +1,5% versus July 2013
Outlook
Q3 growth expected to be in line with Julys
2014/2015 season + 1 to 3% (9,3-9,5 billion litres)
Argentina
Milk Production
After promising start beginning of 2014 milk
production started lagging behind 2013 figures
May 2014 is down 7,3% from May 2013
June 2014 is down 8,4% from June 2013
Outlook
No immediate improvement expected, bad
weather conditions (floods)
Uruguay Supply
Milk Production
May 2014 production down 0,7% from 2013
June 2014 estimate down 6,1% from 2013
July 2014 estimate down 5,7% from 2013
Outlook
No immediate improvement expected
Global Exports
MONTHLY EXPORTS (EU+USA+NZ+AUS+ARG+URU)
250000
200000
Metric Tonnes
150000
100000
50000
SMP
BUTTER
WMP
Linear (SMP)
WHEY
Linear (WMP)
CHEESE
Linear (WHEY)
Global Exports
Most products performing below trend line
technical correction due to price development
notably in China
Global exports have potential to increase as

global demand is there
EU Exports
3 MONTH ROLLING AVERAGE, Index Q1-2014=100
140
120
100
80
60
40
20
0
SMP (100 = 48 775 MT)
WMP (100 = 33 747 MT)
CHEESE (100 = 62 474 MT)
WHEY (100 = 42 124 MT)
LACTOSE (100 = 14 196 MT)
BUTTER (100 = 9 732 MT)
EU Exports
Very good first half of 2014 with gains for most
products (in comparison to first half of 2013)
Especially milk powders and butter doing well
Cheese and whey exports up in July, mainly to Russia
No post Russia ban data available yet
US Exports
3 MONTH ROLLING AVERAGE (INDEX Q1 2014 = 100)
140
120
100
80
60
40
20
SMP (100 = 44 596 MT)
WMP (100 = 3 290 MT)
WHEY (100 = 39 840 MT)
CHEESE (100 = 33 279 MT)
BUTTER (100 = 8 889 MT)
NZ Exports
3 MONTH ROLLING AVERAGE (Index Q1 -2014 = 100)
160
140
120
100
80
60
40
20
0
03/2013 04/2013 05/2013 06/2013 07/2013 08/2013 09/2013 10/2013 11/2013 12/2013 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014
WMP (100 = 146 476 MT)
SMP (100 = 30 109 MT)
AMF (100 = 17 163 MT)
CHEESE (100 = 24 639 MT)
BUTTER (100 = 31 975 MT)
Australia Exports
3 MONTH ROLLING AVERAGE (Index Q1- 2014 = 100)
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
SMP (100 = 15 325 MT)
WMP (100 = 8 646 MT)
BUTTER (100 = 3 532 MT)
CHEESE (100 = 11 946 MT)
WHEY (100 = 2 366 MT)
Argentina Exports
3 MONTH ROLLING AVERAGE (Q1 2014 = 100)
200
180
160
140
120
100
80
60
40
20
0
SMP (100 = 1 785 MT)
WMP (100 = 12 792 MT)
WHEY (100 = 5 038 MT)
CHEESE (100 = 4 737 MT)
BUTTER (100 = 1049 MT)
Uruguay Exports
3 MONTH ROLLING AVERAGE (INDEX Q1 2014 = 100)
300
250
200
150
100
50
WMP (100 = 7 349 MT)
SMP (100 = 1 342 MT)
CHEESE (100 = 3 540 MT)
BUTTER (100 = 1 214 MT)
China Imports
3 MONTH ROLLING AVERAGE (Index Q1-2014 = 100)
160
140
120
100
80
60
40
20
0
WMP (100 = 110 215 MT)
SMP (100 = 30 027 MT)
WHEY (100 = 29 386 MT)
LACTOSE (100 = 6 441 MT)
CHEESE (100 = 5 977 MT)
BUTTER (100 = 7 091 MT)
AMF (100 = 3 682 MT)
CASEIN(ATES) (100 = 1 274 MT)
Indonesia Imports
250
200
150
100
50
SMP (100 = 12 691 MT)
WMP (100 = 2962 MT)
WHEY (100 = 6604 MT)
CHEESE (100 = 1247 MT)
AMF (100 = 535 MT)
BUTTER (100 = 742 MT)
LACTOSE (100 = 1709 MT)
Philippines Imports
3 MONTH ROLLING AVERAGE (INDEX Q1-2014 = 100)
180
160
140
120
100
80
60
40
20
0
SMP (100 = 9 662 MT)
WMP (100 = 1 956 MT)
WHEY (100 = 4 050 MT)
CHEESE (100 = 932 MT)
AMF (100 = 1 114 MT)
LACTOSE (100 = 1030 MT)
Mexico Imports
140
120
100
80
60
40
20
SMP (100 = 14 716 MT)
CHEESE (100 = 8 394 MT)
LACTOSE (100 = 2 665 MT)
CASEIN(ATES) (100 = 1 388 MT)
WHEY (100 = 4 418 MT)
Algeria Imports
250
200
150
100
50
WMP (100 = 12 445 MT)
SMP (100 = 7 969 MT)
CHEESE (100 = 1427 MT)
BUTTER (100 = 420 MT)
Russia Imports
COMBINED EXPORTS TO RUSSIA (EU+NZ+USA+ARG+URU+AUS)
250
200
150
100
50
CHEESE (100 = 21 975 MT)
BUTTER (100 = 9 156 MT)
SMP (100 = 1 882 MT)
WHEY (100 =2 767 MT)
DAIRY SPREADS (100 =798 MT)
AMF (100 = 1 390 MT)
WMP (100 = 1 029 MT)
Global Stocks
We hear:
Stocks have increased in most regions following
high milk production
In EU, especially SMP, butter and cheese stocks
appear to be significantly higher than in Q3/2013,
less so for whey and WMP
US: in particular SMP stocks have increased
Oceania: higher for most products, in particular
WMP
South America: little changes
Conclusions
Global demand is good
Current imbalance is supply driven

Direction of the market uncertain
Supply reaction to lower prices is needed
Thank You
Sources used in presentation: GTIS, USDA, Dairy Australia, Fonterra
DCANZ, Inale
Eucolait
www.eucolait.eu
@Eucolait

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Milk Market Observatory

MMO Economic Board

Meeting of 24 September 2014

The 3rd meeting of the Milk Market Observatory

The meeting was opened with 2 presentations by

Downward pressure on prices registered since

Farmers are not facing yet a severe drop in milk

In the draft short-term outlook prepared by the

Commission , EU milk collection is nevertheless

Publication foreseen the second week of October

expected to show less pronounced growth

The market review showed the need to make sure

Milk Market Situation

Milk Market Situation

Following a data update, the figures shown in this

EU-28 Deliveries/Productions development

Rem : FR 2013-14 da ta not considered (except Milk)

Source : MS' Communications to Eurostat

Rem : FR 2013-14 da ta not considered (except Milk)

Source : MS' Communications to Eurostat

Following a data update, the

Source : MS' Communications to Eurostat

Following a data update, the

Source : MS' Communications to Eurostat

EU - Cows' milk collected ( 30d ajusted months )

Jan-Jul 2014/13 : +5,8%

Following a data update, the

Last Update : Jan-Jul

EU Raw Milk Prices Evolution (up to July 14)

EU Milk Equivalent Price (based on EU SMP and Butter prices)

Milk Prices (LTO)

( Jul 2014 vs Jul 2013 )

Milk Price 2014

Milk Price 2013

Estimates for DK, IT, SE

Weekly EU SMP Prices

Evolution compared to same period last year : -32%

Source: MS communications under Regs. 562/2005 and 479/2010

EU S.M.P. Prices (up to 14.09.2014)

Source : Reg. (EC) No 479/2010 Article 2

Source: MS communications under reg. 479/2010

Weekly EU BUTTER Prices

Evolution compared to same period last year : -26%

Source: MS communications under Regs. 562/2005 and 479/2010

EU Butter Prices (up to 14.09.2014)

Source : Reg. (EC) No 479/2010 Article 2

Source: MS communications under reg. 479/2010

EU Quotations of Butter and SMP

Butter Intervention buying in price

Source: MS communications under reg. 562/2005 and 479/2010

Source: MS communications under reg. 562/2005 and 479/2010

Weekly EU WMP Prices

Evolution compared to same period last year : -31%

Source: MS communications under Regs. 562/2005 and 479/2010

Weekly EU CHEDDAR Prices

Latest price : 323 EUR/100kg

Evolution compared to same period last year : -9%

Evolution compared to same period last year : -9%

Source: MS communications under Regs. 562/2005 and 479/2010

Latest price : 354 EUR/100kg

Weekly EU EDAM Prices

Weekly EU WheyPowder Prices

Evolution compared to same period last year : -12%