Global milk supplies forecast: Expected to flatten off in 2023

According to latest estimates, global milk production is expected to flatten off in 2023 across the key producing regions, only growing by 0.1% year on year.  This is a slight downwards revision from expectations earlier in the year that were sitting at growth of only 0.2%. 

These estimates could be a little on the pessimistic side as yet as production in the year to date in the key regions is up by 0.8% year-on-year although it is likely that falling prices and difficult weather conditions across many regions will suppress performance in the second half of the year, reflected in final estimates. 

The US (0.8%), UK (0.3%) and New Zealand (2.0%) are estimated to register some growth.  Expectations for the US remain reasonably buoyant at 0.8% growth due to higher than expected herd size.  New Zealand have had favourable pasture growing conditions at the beginning of the year and strong milk production so far, despite continued shrinking of the herd. Expectations for the UK for the 2023 calendar year are to be up by 0.3% on last year, despite falling prices and tightening margins.

Despite growth of EU milk deliveries in Spring, predictions indicate a drop off in the second half of the year due to increased slaughterings driven by falling milk prices and high input costs with a reduction of -0.2%. Both Australia and Argentina estimate falls in milk production of 3.0%. 

Lower growth in production globally may not be enough to support prices given the expected continued decline in global demand.

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