Milk production growth in the US is set to be lower than expected this year, but is set to return to strong growth in 2016, according to latest dairy forecasts by the USDA.

It says milk production for 2016 is forecast to be 2.4% higher as improved forage availability and moderate feed costs are expected to support gains in milk per cow.

The USDA also forecasts that cow numbers will also be slightly higher in 2016. This growth will take annual production to 94.1 billion litres.

Latest US forecasts also suggest commercial exports on both a fat and skim-solids basis will be higher next year with a resumption of normal trade patterns. The USDA also says imports are forecast lower as domestic production increases and demand from competing importers is higher.

With stronger domestic demand and export, cheese, nonfat dry milk (NDM) and whey prices are forecast higher, according to the USDA, but butter prices are forecast lower as strong NDM demand is expected to support relatively high levels of butter production.

2015 milk production forecasts continue to fall

The USDA’s latest forecast for milk production in 2015 is lower than last month as drought in the West impacts milk per cow and growth in the cow herd is expected to be slower.

It trimmed 0.7% off its forecast for this year, reducing it to 91.9 billion despite this production is still expected to grow 1.3% from 2014.

Production growth in final quota year for key EU producers

EU milk production in 2014/15 was strong with some key dairying nations showing significant growth, according to year-end data available so far from DairyCo.

It says production across Germany, France, UK, Netherlands, Poland and Ireland grew around 2.6% from 2013/14, an increase of nearly 2.5 billion litres.

DairyCo says EU production growth is expected to continue at around 1% in 2015/16, according to Commission estimates.

However, it says a large jump in production during the first year without quota looks unlikely because low milk prices are expected to hamper growth to some extent.