Global milk supplies recover from slow start to year

Published 25 July 18

Growth in milk supplies from the key supplying regions[1] has accelerated in April and May, following lower than expected production during the first three months of the year. In May, average daily deliveries reached 804 million litres/day, a rise of 2% on last year. 60% of the additional milk came from the EU-28, with growth recorded for the US and New Zealand as well.

Altogether, milk production in the first five months of 2018 is performing ahead of forecasts. In total, milk production from these regions is expected to be 1.5% higher in 2018 than last year, equivalent to an additional 4.3 billion litres. As of the end of May, 53% of this expected growth has already been accounted for, with cumulative production 2.3bn litres higher than at the same time last year.

This is even more pronounced in the EU28, where 82% of the expected growth in milk supplies for 2018 has already been delivered. Based on the forecast of 1.2% annual growth, total EU milk production in 2018 would reach 152.8bn litres, 1.8bn litres more than last year. However, with the strong recovery in milk deliveries in May, deliveries from the start of the year are already 1.5bn litres above last year’s volumes.

The key question is, are those annual growth expectations still accurate? If they are, it suggests that while there will still be some additional milk available to EU manufacturers to meet any growth in demand, there is not significant potential to build stocks further. Certainly the recent poor grazing conditions across much of the EU will also be having an dampening effect on volumes, which could well bring totals back in line with the EU Commissions original expectations.

World Milk Supply Growth

[1] EU28, US, New Zealand, Australia and Argentina