February 1, 2012

EU dairy products in rising demand

Rising economic and population growth in developing countries will drive demand for EU dairy products, according to the European Commission's forecast for agricultural development.

Lennart Holmstrцm, Policy Advisor for the Swedish Dairy Association believes that a continued strong international demand will have a favourable effect on work prices for EU dairy products.

EU exports of cheese and milk powder are expected to increase, while butter exports will fall. No significant accumulation of dairy product stocks in Europe is to be expected until 2020.

However, the EU Commission believes that a stronger euro exchange rate will eventually lead to declining competitiveness of the EU internationally. Thus, the EU share of world markets is likely to decline. EU milk production is expected to increase by 4.5% between 2011 and 2020.