1. Weekly News

European Union

Rapid Spread of Bluetongue Virus Alarms EU Farmers

The Bluetongue virus (BTV-3) is spreading rapidly across the European Union (EU), raising concerns among farmers due to financial loss. The virus was first detected in the Netherlands in Sep-23 and has quickly spread to Belgium, Germany, and England. Cases have surged recently, with thousands of reported cases in the Netherlands and dramatic increases in Germany and Belgium. In addition, France and Denmark reported their first cases in Aug-24. The virus is deadly in sheep and can significantly reduce cow milk production. Symptoms of BTV-3 infection include increased saliva and swelling of the lips, tongue, and jaw, and can lead to miscarriage. Although the virus is not harmful to humans, and vaccines are available, current supplies are insufficient to control the outbreak.

Turkey

Turkey’s Dairy Industry Struggles with Rising Costs and Low Milk Prices

Turkey’s dairy industry faces significant challenges due to rising production costs and low milk prices, putting the sector at risk. Although domestic milk prices are regulated, the situation has reached a critical point, with producers facing increasing feed costs and low production efficiency. The Deputy Minister of Agriculture and Forestry emphasized the need for coordinated livestock policies and a focus on maintaining self-sufficiency rather than depending on imports.

United Kingdom

BCMS Reports 2.1% YoY Decline in Dairy Dam Births in Q2-2024

The British Cattle Movement Service (BCMS) reveals a 2.1% year-on-year (YoY) decline in dairy dam births in Q2-2024, totaling 298 thousand heads. While May-24 saw a 3.6% YoY increase in birth registrations, this was offset by decreases in Apr-24 and Jun-24, down 0.5% and 9.5% YoY respectively. For the first half of 2024, total registrations from the dairy herd fell by 0.5% YoY, amounting to 704 thousand heads. The above-average rainfall in late 2023 and early 2024, coupled with profitability concerns, has led them to focus on breeding only the most productive cows. This strategy aims to reduce cattle numbers while maintaining milk production levels.

United States

US to Monitor and Analyze Bird Flu Infections in Dairy Cows

The United States (US) will begin analyzing and monitoring Avian Influenza (H5N1) infections in dairy cows starting Sep-24 to understand how the virus affects meat. The research will assess the risks associated with consuming meat from infected dairy cows. The United States Department of Agriculture (USDA) will inspect 800 samples from dairy cows in various slaughterhouses to determine the prevalence of the virus in meat. If a sample tests positive, the corresponding carcass will be acquired for further testing. The analyses include testing the virus's viability, replication potential in the laboratory, and the temperature at which it becomes inactive.

Michigan State University Launches Study on H5N1 Outbreak

Michigan State University will launch a study investigating the impact of the recent H5N1 outbreak on dairy cattle. This project has secured USD 168 thousand in funding, with equal support from the USDA's National Institute of Food and Agriculture (NIFA) and the Michigan Alliance for Animal Agriculture (M-AAA). The research aims to address several critical questions, including the short-term and long-term effects of the virus on reproduction and milk production, factors influencing herd-level infection risks, and the determinants of individual cow infection likelihood. In addition, the study will analyze the spread of the virus within and between herds to provide insights into disease management and prevention.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W34 2023 to W34 2024)

Germany

Germany’s powdered milk prices decreased by 3.40% week-on-week (WoW) to USD 3.13 per kilogram (kg) in W34 compared to USD 3.24/kg in W33. However, the month-on-month (MoM) and YoY prices increased by 3.65% and 1.95%, respectively. Germany’s milk prices have been trending upward since the middle of 2023 due to rising production costs and low productivity. However, concerns about milk safety due to the spread of BTV-3 have negatively affected demand, causing short-term price fluctuations.

Belgium

In W34, Belgium’s powdered whole milk prices increased by 1.35% WoW to USD 3.75/kg from USD 3.70/kg in W33 due to the country’s decision to raise the minimum prices for dairy products exported to the Russian market. Belgium’s dairy production cost has increased due to rising feed costs, which led to the country adjusting its export policy. In addition, starting August 9, 2024, the government has mandated that companies sell whole milk powder and butter through the Belarusian Universal Commodity Exchange (BUCE). This decision is expected to impact production and prices.

Netherlands

Skimmed milk powder prices in the Netherlands fell by 4.44% WoW in W34, reaching USD 2.58/kg, down from USD 2.70/kg in W33. The decline is due to low export demand, particularly from China, where dairy imports have significantly decreased since 2023 due to increased local production and a weak economy. However, the Chinese Ministry of Commerce is investigating potential unfair government subsidies for the EU dairy producers and may impose tariffs on the EU dairy exports to China. This situation could shift demand toward the Netherlands.

France

In W34, France’s semi-skimmed milk powder prices decreased slightly by 0.25% WoW to USD 3.92/kg compared to 3.93/kg in W33. The MoM price increased by 5.95%, and the YoY prices increased significantly by 64.02%. The country’s livestock farming faces challenges from various virus infections, including bird flu, bluetongue, and epizootic hemorrhagic disease. As a response, the French government has ordered 68 million vaccine shots and is planning vaccination campaigns in Oct-24.

Poland

In Poland, skimmed milk powder prices increased by 1.20% WoW to USD 2.53/kg in W34. However, the monthly and yearly prices declined by 14.53% and 6.64%, respectively. The weekly price fluctuation is due to the reduced milk production in Western European countries and a shift in production towards butter and cheese. In addition, Poland’s milk processing factories are cutting milk powder production due to declined demand from China.

3. Actionable Recommendations

Diversifying Exports and Adapting to Market Trends

In response to reduced demand from China, the Netherlands and Poland should diversify their export markets to regions with growing demand, such as Africa, the Middle East, and Southeast Asia, Additionally, European dairy producers should adjust their production strategies based on market signals, focusing on higher-demand products like butter and cheese. Monitoring trade policy developments, especially between the EU and China, is essential to navigate potential tariff impacts and maintain global market stability.

Enhancing Surveillance and Farmer Support

With the rapid spread of the Bluetongue virus across the EU, governments must strengthen disease surveillance and expand vaccination efforts, prioritizing highly affected regions. In addition, governments and industry associations must develop financial support mechanisms for farmers, including vaccination subsidies and production loss compensation, which will help mitigate the economic impact.

Strengthening Biosecurity and Supporting H5N1 Research

As the USDA begins monitoring H5N1 in dairy cows in Sep-24, the US dairy producers must take the lead in enhancing farm biosecurity measures to prevent potential virus spread. The industry associations must support the USDA and Michigan State University’s research on H5N1, alongside engaging in public awareness campaigns to maintain consumer confidence in dairy products.

Sources: Tridge, PTvidarural, The Cattle Site, Agronews, Sondakika, Ahdb, AgroPolit.com