January 18, 2021


EU's milk production expected to rise by 0.6% per annum

The EU Commission has recently published its medium-term outlook for agricultural markets.


The report covers the EU-27 and so excludes the United Kingdom.


Milk production in the European Union is expected to increase by 0.6% per annum, reaching 157 billion litres by 2030. Production growth is estimated to be lower than recent years due to a reduction in estimated herd size, in combination with smaller yield improvements.


The segmentation of dairy systems is expected to grow due to varying consumer demands around sustainability and the environment. This will lead to more non-conventional systems in industry, the Agriculture and Horticulture Development Board said.


The share of organic milk production was 3.5% in 2018, and is expected to grow to 10% by 2030, while other systems such as GM-free fed and pasture based are also expected to increase.


Yield growth is expected to be lower than recent years at 1.4% per annum, partially due to this increase in segmentation. However, the growth in non-conventional systems should also prevent a stronger decline in the EU dairy herd. Despite this, herd numbers could fall back to 19.2 million head by 2030, down 7% compared to 2020.


EU export volumes are anticipated to grow 2% per year to 2030, in line with growth in global import demand.


Meanwhile, the value of EU exports should grow at around 3% each year, predominantly from cheese and SMP trade.


Overall, the EU is expected to remain the largest dairy exporter with a 28% share of the global dairy trade by 2030, with the United States gaining 2% and New Zealand dropping back 2% in share.