Dairy Market Review - April 2018

Abstract

World milk output reached 811 million tonnes in 2017, 1.4 percent higher than in 2016. Across geographic regions, milk output expanded in Asia, the Americas and Europe; stagnated in Africa; and declined in Oceania. World dairy exports in 2017 reached 71.6 million tonnes, 1.3 percent higher than in 2016. Milk exports from Africa, Central America, Europe and North America increased, but those from Asia, Oceania and South America declined. A key factor that influenced this expansion was the continued rise in import demand from China, United Arab Emirates, Japan, Mexico and Australia that counterbalanced import contractions from elsewhere, especially Egypt, Brazil, the Philippines, the Russian Federation, Saudi Arabia and Indonesia. Increased supplies from the EU, Mexico, Canada and the United States were adequate to cover export shortfalls from some leading exporters, including New Zealand, Argentina, Australia, Belarus, and Uruguay. The average dairy export price in 2017 was up 31 percent from 2016. In the first half of the year, prices remained stable as ample export supplies from the Northern Hemisphere were sufficient to meet import demand. But from May to September 2017 dairy prices strengthened, driven by strong import demand, especially from Asia, reflecting tighter exportable supplies from Oceania, South America and Europe. From September onwards, dairy prices started to weaken as export supplies increased from almost all major producing countries.