News Milk
Rabobank foresees stiffer EU dairy exports
Milk production in the main dairy exporting countries has grown and is expected to increase even further this year, Rabobank reports in a new dairy update. European dairy exports will be more difficult in the second half of the year, according to the bank's forecast.
Over the first 6 months of the year, the main dairy exporting countries produced approximately 1,2% more milk than last year. European milk production has increased by 1,2%, American dairy farmers have produced 1,3% more milk. An increase is not visible everywhere, as milk production in New Zealand is 1,8% lower than last year. Rabobank expects the milk production of these largest dairy exporters to increase in the second half of the year.
European milk production continues to grow
The 7 largest dairy countries in Europe managed to produce 1% more milk in the first six months. The other European countries have raised total percentage growth to a higher level. Striking increases were in the Spanish and Belgian milk supply, which increased by 3,1% and 3,8% respectively. Rabobank estimates that total European milk production will increase by 2020% in the third quarter of 1,1 and by 0,7% in the fourth quarter. Looking specifically at Dutch milk production, it is expected that growth of 2020% to 1% will be achieved over the whole of 1,3.
Stable dairy prices
The corona crisis has caused (European) dairy prices to fall sharply during the lockdown. Prices have now scrambled back up, but pre-corona levels have not yet been reached. Prices are expected to remain fairly stable in the coming months. However, there may be some pressure on the market because the food service cannot yet run at full strength as a result of the corona measures. In addition, the stored dairy products will gradually come onto the market in the coming months.
Stiff dairy export
Despite the fact that European dairy exports in the first half of the year were considerably higher than last year, according to Rabobank, a more difficult export in the second half must be expected. This expectation is based on the unfavorable exchange rate, low oil prices and an increase in European prices for basic dairy products.
The forecast for Chinese dairy imports for the whole of 2020 is a decrease of 4% compared to last year. This adjusts the previous forecast of a 15% decline. This is because import volumes in the first half of the year were higher than expected and only a limited decrease is forecast in the second half.
Chanti Oussoren
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