January 10, 2020
Demand to exceed supply as global milk production forecast to grow mere 1% in 2020
Global milk production is set to grow by just 1% in 2020, with the majority of the additional milk expected to come from the US and the EU, the Agriculture and Horticulture Development Board (AHDB) said on Thursday, Jan. 9.
The UK statutory levy board noted that Australian production has been declining as it struggles with impacts of record high temperatures and drought, as well as the widespread bush fires that have been raging since September 2019, while growth in New Zealand production is expected to be relatively flat.
Global dairy demand, meanwhile, is forecast to exceed production as the former is seen to rise 2.1% for fresh product and 1.5% per annum for processed products, AHDB said, citing the latest FAO-OECD predictions.
"Demand may, however, be impacted by a slowdown in economic growth over the coming year, particularly from the oil-rich countries who are large importers of dairy", AHDB added.
Considering the modest growth in milk production compared with demand, commodity prices may remain firm, at least for the first half of 2020, AHDB also said.
Dairy prices rose 2.8% at the first auction of this year conducted by GDT Events on Jan. 7, due to low milk supply.