Outlook for EU dairy

Published 25 April 19

EU dairy production is expected to rise in 2019, along with exports and consumption. This is according to the latest forecasts from the European Commission in its spring 2019 short-term outlook. The forecasts include the UK, as it is still a member of the EU at time of publication.

 EU Spring 2019 Outlook Dairy Table

 Source: European Commission

 

Despite an anticipated fall in the EU dairy herd, milk production is expected to increase on the year (+0.7%), boosted by increased yields from higher concentrate feeding.

The trade picture is mixed for the rest of the year. EU exports are expected to rise (+0.8%), fuelled by global demand growth. Cheese exports in particular look positive, with expected growth of 1%, leading to 0.8% higher production. EU consumption of dairy products is also expected to keep increasing, by 0.3% in 2019. EU imports are expected to fall by 7%.

The EU milk price equivalent is predicted to be supported by an increase in the SMP price and a steady butter price. However, high production during the year could weigh on prices.

Protein use for other dairy products (such as infant formula and fat-filled powders) is expected to rise by over 2%, driven mainly by export demand. Development of technical dairy ingredients for nutrition will also support this trend.

These products, coupled with butter production, may offer more attractive returns to processors than making WMP. Production of WMP is therefore expected to decline in 2019.

To read the full report, which includes outlooks for other agricultural markets, click here.