Global milk supplies lower than expectations

Published 14 November 18

World milk supplies have been tracking below expectations since around July 2018. This is, in part, due to actual deliveries falling short due to weather issues, but also due to a shift in production patterns in New Zealand (NZ).

NZ milk deliveries are highly seasonal, with deliveries in June and July accounting for less than 1% of annual production. This year, July deliveries were 20% higher than average on the back of boosted grass growth. Production typically shows more than a four-fold increase between July and August, and this year was no exception. However, as expected deliveries are based on typical month-on-month movements, the high July volumes have caused an overestimation of the tracker in the succeeding months.

Other events contributing to the lower than expected production is the drop off in production in Australia and the EU, both resulting from hot and dry weather. EU deliveries typically show a seasonal decline through the summer months in any case, although this year the declines were larger than average.

The tracker has been adjusted for the final quarter of the year to account for current production patterns, reflecting an expectation that world milk supplies should be roughly in line with 2017 levels.

World Milk Suppliers With Tracker