EU dairy market to undergo a period of adjustment

Published 8 December 15

European milk prices may not recover to 2013 levels for over a decade, according to the EU Commission. Both world milk production and import demand are forecast to increase over the next 10 years, while farmgate prices are expected to be stable between 2016 and 2020, suggesting a fine balance between supply and demand during this period.

Globally, the EU dairy sector is believed to have the highest potential for growth in the future. Annual production is expected to increase by almost 14.6m litres largely driven by productivity improvements. Much of this growth is expected to come from the EU-15 where milk yields are expected to increase to 8,160 litres/cow, this compares with 7870 litres/cow achieved in the UK for the 2014/15 season. The increase in milk supplies is predicted to result in additional cheese, butter and powder production, while demand for fresh dairy products within the EU is anticipated to be relatively stable.

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