December 2, 2024
EU milk production expected to rise amid challenges
Milk production in the European Union is forecast to grow by 0.5% year-on-year in 2025 due to "enhanced margins," according to a new report from Rabobank.
However, the report also warns of potential challenges from low soil moisture and the bluetongue disease that could impact the EU dairy sector in 2024 and beyond.
The Rabobank global dairy market report highlights mixed milk production growth across Europe in 2024. A wet spring in north-western Europe was followed by a "sizzling late summer," but favourable autumn and early winter weather conditions have since provided some optimism for the sector.
Improved weather, combined with rising farmgate milk prices, is driving expectations for 2025. Rabobank forecasts a 0.3% year-on-year gain in EU milk production for 2024, followed by a more substantial 0.5% increase in 2025.
The Republic of Ireland experienced a significant rebound in September 2024, with milk production rising 8% year-on-year, marking growth for the first time in over a year. Despite this, Ireland's full-year production for 2024 is expected to fall nearly 5% short of 2023 levels.
This shortfall has impacted Ireland's skimmed milk powder (SMP) production, which fell by 21.2% (or 27,800 metric tonnes) from January to September 2024 compared to the same period last year. Butter production also declined by 6.2%, equivalent to 14,110 metric tonnes.
Rabobank predicts that, weather permitting, Ireland will see significant milk production growth in 2025, aided by weak comparisons to the challenging conditions of 2024.
Globally, Rabobank notes a "turning point for milk supply growth" in the second half of 2024 across the Big 7 export regions: the EU, the United States, New Zealand, Australia, Brazil, Argentina, and Uruguay.
Michael Harvey, senior dairy analyst at Rabobank, stated that milk supply growth from the Big 7 regions is expected to reach 0.5% in the latter half of 2024, driven by strong seasonal peaks in Oceania. This momentum is anticipated to carry into 2025, marking the first time since 2020 that all Big 7 exporting regions are projected to post gains.
Rabobank forecasts a global milk supply growth of 0.8% in 2025, supported by affordable feed costs and improved weather conditions. The report notes that global dairy fundamentals appear balanced heading into 2025, with a stronger supply of milk and dairy products expected to coincide with improved demand.
However, the report also warns that factors such as geopolitics, disease outbreaks, and weather conditions could influence global trade and production. Michael Harvey highlighted concerns over potential trade tensions, particularly with the election of Donald Trump raising the risk of rising US protectionism.
- Agriland
