April 19, 2018

EU dairy demand inadequate to account for additional milk production

A sustained demand for dairy products in the EU market might be inadequate to account for additional EU milk production, which increased significantly in the second half of last year, according to the bloc's analysis.

In fact, prompted by lower prices, milk collection growth in the region would begin declining in 2019, based on the most recent EU short-term outlook for its markets in 2018 and 2019.

In the months to come, prices will "seasonally" drop, said the Directorate-General for Agriculture and Rural Development.

"Despite sustained demand for EU dairy products and lower than expected milk collection in New Zealand, milk production expansion in the EU and the United States may add supplementary pressure on prices," the Directorate-General added.

Also, in the year ahead, the profile of milk production growth could vary dramatically. EU milk collection in January this year also rose by about 4% compared to 2017.

"The cold temperatures registered in February and March might lead to cows being kept longer inside and delay grass development, which will contribute to a slowdown in milk collection growth, projected at 3% in the first quarter," the Directorate-General stated.

The growth may likely taper further throughout 2018, reversing the trend seen in 2017.

In addition, there is close to a 1% drop in the number of dairy cows compared to the same period last year, a December livestock survey showed. It marked the first drastic drop recorded since 2012.

However, over that time, EU milk production grew to nearly 13 million tonnes, which was an 8% increase.