Milk production easing. What next?

Milk production easing.

Milk production is easing around the world.  Statistics recently released by the US Dairy Export Council show that the rate of change for milk production (as measured year on year) has slowed sharply in the last few months.    It is interesting that the main place where a year on year actual decline is Argentina.

EU rate of surge reducing but not declining year on year.

While the  rate of change has slowed, Figures from the EU still show an increase for the first 6 months of 2016  The green graph is extracted from



EU Cows milk collected yearly change 2016

Major exporters such as the Netherlands, Ireland, Poland and Germany all have significant volume increases.

The European commission has identified that this growth is an issue and has allocated Euro 500 million to support farmers to reduce the volume of milk produced 

This follows previous support measures in March 2016


Low milk prices will reduce milk volumes.

Farm prices are low in Oceania, Europe and China,  so production will reduce.  It is reported that dairy cattle are being killed in China and the imports of powders have surged in 2016 (The vertical bars on the graph) , however, the prices have remained low. (The yellow line on the graph) the graph can be found at

China still buying and may purchase more.

China milk powder imports 2016 July

Chinese reports that it is still profitable / cheaper to purchase imported milk powders than to use locally produced milk.

So demand for dairy products remains, one of the major customers – China is still buying, but the prices are kept low due to a global glut of milk and the threat of lower priced product undercutting existing suppliers.

China milk powder imports 2 years to June 2016


Positive moves have been made by the EU to reduce production – partly by investment by the government to stop farmers producing too  much and also by buying and storing excess product (Intervention).

The outcome.

The question remains – what will happen to demand and price.  My estimate is that demand will remain, production will reduce in China, the EU, South America and North America.  So some time in the future the biorhythms will rise, the price will surge again and hopefully people and companies will be able to ride the waves a little better.









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