Milk production in the EU is forecast to grow by 0.5% year on year in 2025 because of “enhanced margins”, according to a new Rabobank report published today (Wednesday, November 27).
However the latest RaboResearch global dairy market report also highlights that “headwinds could arise from low soil moisture and bluetongue disease” in the EU next year.
In general milk production growth across Europe in 2024 was “mixed”, following a wet spring across most of northwestern Europe, and a “sizzling late summer” autumn and early winter weather turned “favourable”.
“Weather improvements plus escalating farmgate milk prices are providing optimism for the sector in 2025.
“RaboResearch forecasts a 0.3% year on year gain in 2024 followed by a 0.5% increase in 2025,” the report detailed.
Ireland
It also noted that improved autumn weather in Ireland “pushed September’s milk growth” up by 8% year on year – into “positive territory for the first time in more than a year”.
However Rabobank’s latest research report also suggests that full year production is expected to fall short of the previous year by nearly 5%.
“As a result Ireland’s Skimmed Milk Powder (SMP) production from January to September 2024 was down 21.2% or 27,800 metric tonnes (mt) compared to the same period last year.
“Likewise the Emerald Isle’s butter production trails the prior year by 6.2% down from 14,110mt,” it stated.
Rabobank has forecast that, weather permitting, Ireland will “easily increase milk production in 2025 against dismal 2024 comparisons”.
Rabobank
According to Rabobank’s latest global dairy market report the second half of 2024 has marked a “turning point for milk supply growth” across the Big 7 export regions – which includes the EU, the United States, New Zealand, Australia, Brazil, Argentina and Uruguay.
Michael Harvey, senior dairy analyst at RaboResearch, said 0.5% milk supply growth from the Big 7 export regions is expected in the second half of 2024, driven by significant seasonal peaks in Oceania.
“Supply growth will maintain its momentum in 2025, with gains expected in all Big 7 exporting regions for the first time since 2020,” he added.
The report also highlights that RaboResearch forecasts milk supply growth of 0.8% in 2025. Affordable feed costs and improved weather are supporting milk supply growth.
“Global dairy fundamentals remain mostly balanced moving into 2025.
“There are more milk and dairy products in the pipeline, and demand should also improve in 2025. However, geopolitics, disease, and weather could influence trade and production.
“With the election of Donald Trump, markets are watching for the risk of rising US protectionism and potential trade tensions” Harvey warned.