Higher EU milk production expected again in 2016

Despite milk prices at near record lows in parts of the EU, milk production across the continent is set to rise again this year, according to the European Commission.

In its latest outlook for the year, the Commission says a further increase in the number of dairy cow numbers in older EU Member States (+1.2%) was recorded in November/December 2015 compared to last year.

By contrast, the 3% decrease in dairy cow numbers in newer Member States was the highest recorded since 2011.

It notes that there are significant differences between Member States from a 5% decline in Poland and Estonia to a 10% increase here in Ireland.

According to the Commission, these developments imply further increases in EU milk deliveries in 2016, especially during the first quarter (+5%), which compares to the same period in 2015 when many farmers reduced production in countries at risk of exceeding their quota.

eu milk production

By contrast, under normal weather conditions, milk deliveries could stabilise at slightly below 2015 level towards the end of the year, it says.

In 2016, the Commission forecasts that deliveries could therefore grow by around 2 million tonnes.

While limited growth is expected in France, where cooperatives and dairy companies limit incentives for farmers to expand production, significant increases are expected in Ireland, the Netherlands and Denmark.

Higher deliveries could also take place in the UK, while only a limited expansion is expected in Germany.

Contrary to this trend, the Commission says that the eastern part of the EU could experience a stabilisation of deliveries, especially in view of herd developments in Poland, Hungary, Slovakia and the Baltic countries.

Global production

Meanwhile outside the EU, the USDA forecasts for 2016 higher deliveries in the US (+1.9 million tonnes; +1.6%), Australian production could remain stable while production in New Zealand could further decline by 600 000 tonnes.

In total, in the EU and the latter countries, the Commission forecasts 3.5 million tonnes additional milk is expected to be produced in 2016.