What’s happening in key export regions?

Published 18 May 16

More milk is expected from the US in 2016. In the latest World Supply and Demand Estimates report for May, the USDA has revised its 2016 forecast up by 264m litres (0.3%), from what it forecasted in April. This updated forecast would see an increase of 1,659m litres on milk production for 2o15. The expected increase has been attributed to more cows and better yields.

Estimating some EU countries’ March production puts the EU as a whole nearly 4.2% up in 2015/16 on the previous year. This is “overstated” somewhat, as a number of EU countries were reducing production last year to limit the impact of superlevy. However, the flush is still expected to be higher than normal, although production growth could ease through the year.

Dairy cow numbers have fallen in NZ for the first time in 9 years, according to official figures from Statistics NZ. The herd sits at 6.5m in June 2015, similar to 2013 numbers. NZ’s 2015 milk production was recorded at 20,911m litres. Reports state that cow numbers are expected to reduce in NZ this year, suggesting a fall from 2015 production.

Combining these three regions, the decline in NZ could be key as to how much pressure is taken off prices, with production in the Northern Hemisphere not expected to decrease in the near future. However, in the UK, the sustained low milk prices and ever changing weather conditions are already impacting milk production. It is too early to say what impact this is having/could have on the rest of the Northern Hemisphere.