W50 Dairy Update: Challenges in Dutch Production, Shifting EU Exports and 11.0% YoY Growth in Türkiye's Cow Cheese Production

Bluetongue Outbreak Impacts Dutch Dairy, Nov-23 Sees 3.6% YoY Decrease in Milk Production

In Nov-23, dairy manufacturers in the Netherlands received a total of 1.07 million metric tons (mmt) of milk, marking a decrease of over 40 thousand metric tons (mt), indicating a 3.6% year-on-year (YoY) reduction. This decline follows a trend of lower milk supplies since Sep-23, concurrent with the onset of the bluetongue outbreak in the Netherlands. In the months leading up to Aug-23, milk supply exceeded the previous year's levels by an average of 30 thousand mt. Bluetongue's impact is notable in Sep-23 with a decrease of 13 thousand mt, followed by a more substantial drop of 27 thousand mt in Oct-23r, and a further increase to a 40 thousand mt difference in Nov-23.

Bluetongue outbreak is considered as a contributing factor affecting dairy cattle's milk yield due to heightened immune activity. From Sep-23 to end-Nov-23, bluetongue infections surpassed 5,500, with an additional 300 cases reported in W50. Meanwhile, the fat content remained stable YoY at 4.52%. Despite lower milk production, this amounted to approximately 48.5 thousand mt of milk fat, around 2 thousand mt less than Nov-22.

Actionable Recommendations for the Netherlands Dairy Market

Explore short-term importing opportunities in the Dutch dairy sector amid the bluetongue outbreak, causing a 3.6% YoY decrease in milk production for opportunities. Monitor bluetongue disease developments and government responses. Diversify by exploring alternative dairy sources to mitigate supply chain risks.

Polish Dairy Exports’ EU Market Share Declines, Non-EU Revenues Surge in Q1-Q3 2023

In the first nine months of 2023, European Union (EU) countries accounted for 67% of Poland's dairy product exports, generating revenues of USD 1.92 billion, representing a 14% YoY decrease. Key EU markets included Germany with 18% of the value and USD 510 million, primarily purchasing liquid milk, cream, cheese, and cottage cheese; Czech Republic (7%, USD 188.5 million) for cheese, cottage cheese, and butter; Italy (over 5%, USD 149 million) for cheese, cottage cheese, powdered milk; the Netherlands (4%, USD 127 million) for butter, cheeses, cottage cheese, and powdered milk; and Romania (4%, USD 126 million) for cheese, cottage cheese, and butter.

Non-EU countries constituted 33% of Poland's dairy exports, amounting to approximately USD 0.94 billion, reflecting a 9% YoY increase. Dominant non-EU markets included Algeria (5%, USD 145 million) for powdered milk and condensed milk; Great Britain (5%, USD 144 million) for cheese, cottage cheese, and ice cream; Ukraine (over 3%, USD 91 million) for cheese and cottage cheese; China (almost 3%, USD 75.6 million) for liquid milk, cream, and whey; and Saudi Arabia (2%, USD 55 million) for cheese, cottage cheese, and powdered milk.

Actionable Recommendations for Poland’s Dairy Market

Capitalize on non-EU markets as Polish dairy exports to the EU face a 14% YoY decline as an opportunity. Diversify product offerings for non-EU markets for risk mitigation. Stay informed about EU regulations affecting dairy exports.

Turkish Dairy Sector Flourishes with Notable 11.0% YoY Growth in Cow Cheese Production

In Oct-23, the dairy sector in Türkiye exhibited substantial positive trends in key metrics as per data shared by the Turkish Statistical Institute (TUIK), with a noteworthy 8.2% YoY surge in cow milk collection by commercial dairy producers. This uptick is indicative of robust growth and operational efficiency within the sector. Concurrently, cow cheese production experienced a considerable 11.0% YoY increase, underlining the Turkish dairy industry's ability to meet rising demand for this dairy product. Additional positive indicators include an 8.2% YoY growth in buttermilk production, a 5.8% YoY increase in yogurt production, and a notable 12.7% YoY expansion in drinking milk production.

However, the butter production segment witnessed a downturn, contracting by 6.3% YoY. Cow milk collection by commercial dairy enterprises grew by 4.2% month-on-month (MoM) in Oct-23, reaching 819.4 thousand mt, up from 786.2 thousand mt. Particularly noteworthy is the 10.1% MoM surge in drinking milk production, which reached 136.2 thousand mt in Oct-23, showcasing the sector's responsiveness to evolving consumer preferences and market demands.

Actionable Recommendations for Türkiye’s Dairy Market

Importers can consider long-term contracted investments in the Turkish dairy sector, which showcased an 11.0% YoY growth in cow cheese production and positive trends in other key metrics for opportunity. Conduct thorough market research, ensuring alignment with evolving consumer preferences. Monitor regulatory changes affecting the dairy industry in Türkiye.