Global milk production up 3.4% in January-February

Global milk production increased by 3.4% in January-February 2016, mainly due to strong production growth in the EU.

This was revealed this week during the 14th meeting of the Milk Market Observatory’s (MMO) Economic Board which took place with the participation of experts from numerous links of the international milk supply chain.

The aim of the MMO is to provide the EU dairy sector with more transparency by means of disseminating market data and timely, short-term analysis.

EU milk collection was up by 5.2% in January-February, with percentage increases particularly strong in Ireland, Northern Ireland, Luxemburg and Belgium.

“Dairy product prices continue to suffer from downward pressure given increased supply,” the MMO observed.

Banks are increasingly reluctant with regard to investments in dairying, given the present lack of profitability and of short term improvement prospects.”

The MMO also said the 1.8% increase in U.S. milk production was higher than expected in March, in light of the U.S. Department of Agriculture  growth forecast for 2016 of 1.5%.

New Zealand production was also higher than expected in February (up 2%), but is likely to end up slightly down for the season.

A dedicated presentation was made on the measure adopted on 11 April.

These allow for voluntary agreements between recognised producer organisations, their associations, recognised inter-branch organisations, cooperatives and other forms of producer organisations to plan milk production for a temporary period of six months.

The authorisation covers the European Union territory and applies from 13 April to 12 October.

“Overall, bearish market sentiment persists.,” the MMO concluded.

“While developments in world demand give reasons for hope, farm gate milk prices and dairy commodity prices continue to be under pressure, due to deteriorating EU market balance.

“Improvement in the supply/demand equation remains necessary.”