‘EU milk production to grow by 1.2% in 2015’

EU milk production is projected to grow by 1.2% to 162.4m tonnes, the Food and Agricultural Organisation (FAO) of the United Nations (UN) has said.

The FAO says in its Biannual Report on Global Food Markets that this growth is stimulated by reduced feed costs, a favourable start to the current season and the abolition of the European Union’s milk quota system.

The report says that with the ending of the quota system, several EU member-states, particularly Ireland, the Netherlands and Germany, are expected to maximize their production, while others with less favourable production conditions may register a decline.

This diverging trend within the EU has meant that 2014’s exceptional rise in dairy cow numbers has not been repeated and the herd size is stable, it says.

For the EU, the current April-March dairy year marks the first time in 31 years that milk production will not be constrained by the milk quota system, which could facilitate higher exports.

Global outlook

According to the FAO report world milk production is forecast to grow by 2% in 2015, a rate similar to previous years, to reach 805m tonnes.

Asia is expected to account for most of the increase, but production is projected to rise in all regions, it says.

The two principal exporters, New Zealand and the EU, which together account for slightly more than 50 percent of world exports, are both anticipated to record an increase in sales.

Milk production in the Russian Federation is anticipated to move sharply lower in 2015, as poor profitability has caused a contraction in the dairy herd, in particular in the small farm sector, the report says.

The report says that a favourable opening to the April/ March dairy year in the EU, combined with the abolition of the milk quota system, raised expectations of abundant world export supplies.

Trade

Trade in dairy products is forecast to grow by 2.7% to 74m tonnes of milk equivalent, linked to a favourable milk production outlook in most of the major exporting countries, the FAO report says.

It says that Asia is expected to remain the main centre for rising international demand, although growth may be slower than in recent years.

Uncertainty over the level of China’s imports during 2015 and continued trade prohibitions imposed by the Russian Federation have tempered demand and prices.The United States may maintain shipments at a similar level to last year.

Increased purchases are forecast for China, Saudi Arabia, Malaysia, the United Arab Emirates, Vietnam, the Philippines, Thailand and Oman, it says.

Elsewhere in Asia, Singapore, Japan, and the Republic of Korea will remain important markets, but the level of their imports is not expected to change markedly and, in some cases, could decrease, it says.

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