Global milk production growth driven by herd expansion: Medium-term outlook (2019-28)

Published 24 July 19

  • Global milk production is expected to increase by 1.7% per year
  • Global consumption of fresh dairy forecast to increase by 1% per year
  • Global production of dairy products projected to increase between 1-2% per year

Over the next decade (2019-2028), global milk production is projected to increase by 1.7% per year, according to the latest outlook from OECD-FAO. By 2028, global milk production is forecast to reach 981 million tonnes.

While global average milk yields are expected to increase (0.4% per year), the majority of the growth in production is due to come from expanding herd sizes (1.2% per year). This is in contrast to the previous decade, and is driven by herd growth in countries with lower yielding animals.

India and Pakistan are expected to account for half of the global production growth. By 2028, India and Pakistan together are forecast to account for 30% of global milk production. While EU production is expected to grow, it is more muted than the global average.

Global consumption of fresh dairy products is projected to increase by 1% per annum over the next decade. This is slightly ahead of the current rate, and is driven by an expanding population and rising incomes in developing countries.

Therefore at a global level, growth in milk production is set to exceed the expected growth in fresh dairy demand. In contrast, this year is actually showing the reverse trend. Global milk supplies are forecast to increase by just 0.3% this year while global demand is expected to increase by 1.8%. Tightness at a global level is providing support to markets.

In recent years, there has been a stronger demand for milk that other milk solids at a global level, and this is expected to continue. Butter prices are expected to decline over the next decade, in line with other agricultural commodities. Meanwhile, skimmed milk powder (SMP) prices are actually expected to increase over the next decade. Intervention stocks have weighed down the market in recent years., but with all of the intervention stock now sold, SMP prices are expected to recover from the relatively low base.

Forecast Growth In Global Milk Production And Consumption

Production of the main dairy products are due to increase, and by 2028, half of the cheese produced globally is expected to come from the EU.

Forecast Growth In Global Dairy Product Production

In some regions, growth in demand is expected to outstrip supply, providing further export opportunities for the key milk supplying regions. For example, we recently highlighted the potential export opportunities in Nigeria.

Felicity Rusk