EU milk output rising, but jury out on production prospects for New Zealand

Milk production across the EU-28 has been rising steadily for the past four months and is now approaching levels seen last year.

According to the latest official data, daily production in February was just 5.3m litres/day lower than last year. The recent gains are mostly due to increased output from Italy, Poland, France and the UK.

According to the EU Commission’s latest outlook figures, milk production for 2017 is expected to be 0.6% above last year. It is expected that the gap on last year will be closed during the spring, and most of the growth will occur in the second half of the year.

While March’s production data is not yet available for all member states, estimates indicate the gap has narrowed further. There are reports of colder weather across much of the EU more recently, which may slow the upward pace of production. However, it is likely that the gap will be closed at some point in the next couple of months, assuming farm-gate prices do not drop significantly.

Meanwhile, AHDB Dairy is reporting that, after being hit by two severe storms, milk production in New Zealand will undoubtedly be impacted, at least in the short term.

Prior to the storms, better-than-average growing conditions had boosted milk production above expectations. This led to predictions by the Ministry of Primary Industries that milk production could rebound by around 3% in the 2017/18 season.

Over the past two weeks, however, the pasture growth index has dropped below the long-term average, as the soil moisture content is exceptionally high. With grazing restricted, and farmers having to deal with higher feeding costs, production is expected to drop in the short term.

The overall impact should be limited, however, as April and May typically account for only 9-10% of New Zealand’s full-season production.

It is less clear what the longer-term impacts of the recent storms will be. If soil moisture levels remain high, there will be a longer lasting effect on both grazing and feed crops, which could then extend the problems into the peak production season. According to DairyNZ, next season’s recovery is now dependent on how the remainder of the winter plays out.

CLASSIFIED ADVERTS