Weather events slow down global milk production

Published 15 August 18

The impacts of the dry, hot weather in Europe and Australia showed in global milk supplies in June. For the first time since February 2017, growth in global milk supplies was less than 1%, with deliveries averaging just under 761m litres per day.

Earlier forecasts suggested growth in global milk supplies for 2018 of 1.5%, or around 4.3bn litres more than 2017. While deliveries in the first half of 2018 are roughly on track with these forecasts, current events in global dairy markets may limit growth in the second half.

In the EU-28, while milk deliveries remained slightly higher than last year, some key producing regions (such as Germany, France, and Poland) saw growth in milk deliveries drop off as the hot weather impacted grazing conditions. Meanwhile, the drought in Australia has ended the growth they have been experiencing for the past year, with average daily deliveries in June 1.4% lower than last year.

In New Zealand and the US, where production has maintained year on year growth so far this year, there are some risks of a slow down due to lower pricing. Fonterra recently announced a drop in the forecasted milk price for the upcoming season, while the current trade wars may put downward pressure on US milk prices as access to export markets is reduced.

Annual Change World Milk Deliveries