Global milk production set to grow in 2018

Published 21 November 17

Milk production across the 5 key dairy exporters looks set to increase next year by 1.5%, bringing global supplies to around 289 billion litres. This is in line with the FAO’s 1.7% growth in processed dairy product consumption forecast for the next year.

The EU-28, the biggest producer, is expected to see good growth, buoyed by rising milk prices and yield gains. These are expected to boost production by 1.4% in 2018. Yields gains are also set to benefit the USA, which is expecting production to grow by 1.8% in the new year.

New Zealand production is forecast to grow 0.5% on the back of an expected 25,000head increase to the size of the dairy herd and a return to normal weather patterns after this year’s wet spring.

Favourable conditions for pasture growth, improved farm gate prices and herd rebuilding are expected to drive growth in Australian milk production next year with the USDA expecting 2.2% growth after a difficult two years.

Argentine production suffered under poor weather and high inflation in 2017 which has accelerated concentration of farming with smaller farms being pushed out of the market. Perhaps reflecting uncertainty over the state of production, there are few forecasts of 2018 production for Argentina.  The FAO however has estimated growth of 1.3% per year over the medium term as the sector recovers.