Analysis Milk
What is the milk supply doing outside Europe?
In Europe, milk supply has been in short supply in recent months, resulting in sky-high prices for butter and cream. What is the status of the large producing countries outside Europe that also play a major role in global dairy exports?
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US milk supply has been quite slow in recent months steady, where there is a slight increase. In October, production in the 24 major dairy states amounted to 8,14 million tons, which is an increase of 0,4% compared to the same period last year. In the second quarter there was a significant decline, which means that total production in 2024 may be lower than a year earlier. American dairy farmers have been keeping more cows in recent months. This is probably a result of rising milk prices.
New Zealand has started the season well
New Zealand has started the 2024/25 production season with a large lead. At 2.6 million tonnes, supply in September was 4,1% above last year's level. This is also the highest level since 2020. The coming months - as milk supply approaches peak production - will show whether the large lead will remain intact. It will not be due to milk prices. Major processors such as Fonterra and Synlait have further increased milk prices for this season, basing this on rising prices on the Global Dairy Trade. Never before have milk prices been as high as they are now, although costs on dairy farms due to inflation are also being felt.
Production in Australia continues to recover
Since April 2023, milk production in Australia has been picking up again, after years of decline. Growth will continue in 2024 for the time being. At 812,50 million litres, supply in September was around 1,5% above last year's level. Growth is mainly due to increasing production in the states of New South Wales and Victoria. This is attributed to favourable weather conditions, with sufficient rainfall being the crucial factor. Growth is weakening somewhat this year, however, because production increased by more than 2023% in 24/3.
Argentina ramps up production again, joins Brazil
Argentine milk production started 2024 with a significant deficit, but has since recovered nicely. At 1,06 million litres, supply last month was only 0,4% behind last year. Over the whole of 2024, the deficit is still 8,5%. The difficult start this year is a result of the inauguration of President Javier Milei, exactly one year ago. His drastic economic policy motivated dairy farmers to scale down production. However, low dairy stocks caused milk prices to rise quite sharply, which is why production is now being increased again. The economic situation in the country is still precarious. In Brazil, after years of decline, there has been slight growth again this year. In the first three months, supply was 18,3 million litres, around 1,5% above last year's level.