Rising costs drive EU milk prices to near 10-year high

In the post-coronavirus economy, inflation in Europe is very high, and the war in Ukraine is putting more pressure on farmers across Europe. France, Germany, the Benelux (Belgium, Netherlands, Luxembourg) and southern Europe, the EU's largest milk-producing regions, were hardest hit, while Poland, Ireland and Denmark were largely unaffected.

UK fertilizer prices have risen from £315 per ton to £930 per ton (equivalent to €366 per ton to €1081 per ton). The National Union of Farmers Dairy Council said diesel prices had doubled, from £0.63 to £1.29 a liter (€0.73 to €1.50), pushing up fertilizer prices.

Diesel prices in Portugal are up 62%, maize prices are up 77% and nitrogen fertilizer prices are up 140%, the European Union's milk committee said. Energy costs in France have risen by 30%, and fertilizer costs have risen by more than 80%.

U.S. milk production begins seasonal increase

Negatively affected by rising milk costs, an interesting thing is happening in Europe, large European dairy traders in places such as the Netherlands are looking to import cheese from the US because it is cheaper there. Milk production is rising in the U.S. Midwest as the seasons change, and some cheesemakers say they will increase cheese production in the future. Cheesemakers say there is strong retail demand for cheddar and Italian-style cheese, with Asian buyers buying in bulk for shipment in the second quarter of 2023.

Latin America benefits from better climate and higher milk prices

Milk prices in Latin America began to fall in September after hitting record highs in August, but prices are being supported by growing demand. Producers have been able to comfortably cope with increased operating costs in recent months due to higher milk prices. In the first half of 2022, milk production in Latin America increased by 3.3% compared to the same period last year. The increase was partly due to consistently good weather, which favored recovery in drought-affected countries. Milk prices are also rising, helping to boost production. Due to the increase in Brazil's own milk production, the need for imports has been greatly reduced. Over the past few months, Brazilian exports to places such as Algeria and China have started to increase.