No growth in global milk supplies for 2019

Thursday, 24 October 2019

Global milk supplies for 2019 are set to end up on a par with last year based on the latest forecasts. Earlier in the year, expectations were for a small increase from 2018, forecast at 0.3%. However, lower than expected deliveries in the EU, and a slowdown in growth in the US, have eroded even this small increase in supplies.

European Union

  • growth in milk production is expected to reach 0.5% for 2019
  • deliveries so far this year (to August) are up 0.4% as the key producing regions of France and Germany have struggled to recover from the 2018 drought
  • milk prices have remained around break-even levels but further spells of hot weather have kept a cap on yields
  • good growth is expected from Ireland, Poland and, to a lesser extent, the UK, which will partly compensate for the decline in other regions

United States

  • forecasted growth in production remains at 0.3% for the year, well below the typical growth rate of 1.0%-1.5%
  • the extended period of low prices, and hence reduced margins, has led to a contraction in the national dairy herd
  • yield improvements have helped to counter the impact of reduced cow numbers

Argentina

  • favourable weather and higher milk prices are behind the recovery in milk production
  • year on year growth was recorded for the first time this year in August, with deliveries up 2.1%
  • total deliveries so far in 2019 continue to trail last year, but production is expected to be only 2% behind 2018 by the end of the year, compared to the previous forecast of a 5% drop

Australia

  • milk production continues to contract, although at a slower rate than last year
  • farmgate milk prices are increasing but offset by higher input costs
  • herds are shrinking as farmers’ margins continue to be squeezed

New Zealand

  • production has been at high levels since the start of the season
  • year on year growth has been below 1% so far this season due to the high deliveries in late 2018
  • expectations are for growth of between 0-1% for the 2019/20 season
Image of staff member Patty Clayton

Patty Clayton

Lead Analyst - Dairy

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