In the recent ‘Prospects for Agri Markets and Income in the EU 2013 – 2023,’ released by the EU Commission, the medium-term prospects for milk and dairy commodities, in particular cheese, were described as favourable across global and European markets, according to David Owens of Bord Bia in its latest Food Alert.
Milk deliveries are forecast to increase by 7.7 million tonnes, or 5.4 per cent, from 2013 to 2023, with almost all of this extra milk coming from EU-15 markets, he noted.
The report says despite strong demand and the end of the quota system, expansion in milk production is expected to face limitations stemmed from environmental constraints, which will play an increasing role in certain member states.
According to Owens, in 2014, in the lead up to quota abolition, EU production will increase by 1.5 per cent or 2.2 million tonnes driven by lower feed costs and firm milk prices.
“A further growth of 1.6 per cent is expected in 2015 as some of the increase will already have happened. From 2016, deliveries are expected to increase year-on-year but at a slower pace than 2014/2015, reaching 150 million tonnes by 2023.”
According to the Bord Bia dairy expert, much of this additional milk is destined for cheese production (plus one million tonnes), with both EU cheese consumption ( plus 800,000 tonnes) and exports ( plus 210,000 tonnes) expected to increase over the next 10 years.
He said new markets in Asia, South America and North Africa—rather than the traditional export markets of Russia, US and Japan—are expected to show greatest growth for EU cheese.
“Despite a very developed EU cheese market, consumption across the EU is forecast to grow by an average of 1.3 kg/head to 18.9 kg /head.
He continued: “With buoyant demand for whey in the infant formula and sports nutrition sectors, exports in particular are forecast to jump from 562,000 tonnes to over 800,000 tonnes.
For butter, a marginal increase in production of just 47,000 tonnes or two per cent to 2.3 million tonnes is expected, with consumption levels across the EU forecast to decline.”
According to Owens, for milk powders, a contrasting trend is anticipated, with an 18 per cent increase in SMP production suggested, whereas WMP production is forecast to decline, with world production dominated by New Zealand.
“Demand from import markets plays an ever-increasing role in dairy markets. With annual world import demand growth of between two and four per cent expected for dairy commodities, this presents real opportunities for Irish and European dairy processors,” he concluded.