Milk production forecasts lowered as farmgate prices bite

Published 27 July 15

Milk production forecasts for 2015 in some key dairying regions have decreased because low farmgate prices are expected to start impacting global supply, according to the USDA.

Combined EU, US and NZ production is now expected to grow around 0.6% year-on-year, down from last December’s forecast of 1.3%.

This is due to reductions in the US forecast and an expectation of a fall in NZ production. The EU’s forecast has remained unchanged, with some growth (0.3%) still expected despite pressure on farm margins.

Whilst slower growth is better news, the latest forecast still equates to nearly 1.5 billion litres of extra milk compared to last year. Therefore it will take a bigger slowdown or a rise in buyer demand before the market comes back into balance to ease pressure on prices.

Production forecast 27.07.15