Global dairy slump until the summer

Next year’s increased Irish milk production will hit a depressed global dairy market — until July at least, according to industry experts.

Market recovery is not anticipated until Chinese imports rebuild, and Russia re-opens fully to food imports.

Russia said its import ban last August from the EU and other countries would last for a year.

Dairy product markets and prices have slumped globally due to increased supply and reduced demand.

Global output is estimated to more than 4% higher this year.

The big buyer, China, is likely to import 75% less until the New Year, compared to last year, partly because its own milk production is improving. Markets may be slower than normal to adjust on the supply side, because US farmgate prices for milk are still strong, milk production costs are falling due to cheaper feed, and the removal of EU quotas in April will increase the likelihood of a further increase in export surpluses, despite generally falling milk prices.

However, industry sources still see good long term prospects for the dairy industry.

Global demand for milk is set to surge 36% in the next decade, according to industry suppliers Tetra Pak. “The world’s middle classes are growing, more consumers can afford dairy products, and they create a stable demand for healthy, nutritious and safe milk products,” said Peder Tuborgh, CEO of European dairy co-op, Arla Foods.