EU analysts forecast further dairy expansion

Published 23 March 16

In its latest short-term outlook, the EU Commission forecast higher milk production again in 2016. The expectation is for an increase of around 2.4bn litres (1.6%), although growth will be uneven across member states. Across the EU, there was a 1.2% rise in the number of dairy cows as of December 2015. Cow numbers in the EU-N13* dropped by 3%, but this was countered by an increase of roughly 250k head (+1.4%) in the EU-15.

 EU regional variations

 *EU-N13 refers to new member states post-2004; EU-15 are the original member states.

In the medium term, the Commission expects that global demand for dairy will continue to grow at an average rate of 1.9% per year over the ten years to 2025. This will be driven by steady growth in world and domestic demand for dairy products, leading to the need for roughly 15.5bn litres of additional milk per year. Most of this will be supplied by domestic production although import demand is still expected to grow. Demand will predominately come from developing countries as populations increase, but also from increasing per capita consumption worldwide.

With no constraints on production, EU milk deliveries are projected to grow by around 0.8% per year over the 10-year forecast period, equivalent to an extra 1.3bn litres per year. The majority of this extra milk (52%) is expected to be used in production of milk powders and exported to service growing global demand. Rising domestic consumption within the EU will be the main driver for increased cheese and butter production.

The full reports can be accessed from the EU’s Milk Market Observatory.