Global Dairy Production and Prices

AHDB Dairy has reported milk production in the five main exporting regions, EU, US, NZ, Australia and Argentina, is finally starting to slow down.  We have written previously that production in NZ is forecast to ease, and it has recorded the largest reduction; down 7.5% compared to September last year.  But the EU, US and Australia have also all shown a reduction on production for the same period.  The AHDB’s annual milk production equivalent for the five main exporting regions for September is down by 7 billion litres to 278 billion litres compared to its peak in July.

Even so, the latest results from the Global Dairy Trade (GDT) auction show a third consecutive decrease in the overall price index.  The problem being that global stock levels remain high and will continue to have an effect on prices in the short to medium term.  The auction held on 17^th November saw the price index fall by a further 7.9%.  Notably SMP and WMP fell by 8.1% and 11% respectively, the third drop in a row.