The EU is larger but its stocks of dairy products are set to fall by the beginning of next year.

Butter output in the ‘old’ EU will slow this year by 3%. However, consumption will show little change and exports to third countries have been good. The effect of this will be a reduction in year-end stocks by 30,000 tonnes - even after allowing for the extra production of about 350,000 tonnes of butter in the 10 new member states.

SMP production stocks are expected to drop by 100,000 tonnes compared with the start of 2004. Output of SMP in the new EU members is expected to be 200,000 tonnes. But even this extra will not prevent total EU stocks from falling.