Archive: Milk powder processing absorbs increased EU milk supplies

Published 10 September 14

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Global milk supply is still strong and remains the dominant feature in world commodity markets. In the EU, milk production is up 5.1% in the first six months of 2014. Much of this increase in volumes has been used in the production of milk powders, with SMP and WMP production up by 9.6% and 16.7% respectively. The increase in the volumes of milk diverted to these products is likely to have been encouraged by the growth in global demand for them. There is also extra capacity for milk powder production, with half of the European dairy processing investments over the last two years spent on dry ingredients such as milk and whey powders, according to CNIEL.

Over the same period, cheese production was up only marginally. This is despite 2013 output already being lower than 2012, due to reduced milk supplies. The fact that there are not significant extra quantities of cheese is encouraging in light of the Russian ban. However, the indirect impact of the ban on the EU SMP market could be worsened by the growth in milk powder production so far this year.