United States and European Union dairy production figures are slowly increasing after many months in decline, signalling a supply-side change in global dairy markets.
In the US, dairy production rose 0.8% in December 2022, compared with the same month a year earlier, and production for the calendar year 2022 was up 0.2% compared with 2021.
That is the sixth consecutive month of small increases compared with eight previous months of decline.
EU production rose 1.7% in October, the latest month for which figures have been published, and the 12-month change is minus 0.4%.
According the Fonterra’s Global Dairy Update (GDU) published on January 31, Australia’s milk production was down 9.7% in November and down 6.2% in the 12 months to end November.
“A significantly wetter and colder spring materially impacted the availability and quality of pasture, silage and hay,” the GDU says.
“Summer conditions have been more favourable and milk production is beginning to stabilise through December and January.”
Commenting on trade figures, the GDU says US dairy exports rose 7% in November and 3.7% in the year prior, driven by lactose, cheese and butter.
Also mentioned are stronger demand for butter by Canada, whey protein concentrate by China and cheese by Mexico.
In contrast, dairy exports from New Zealand and the EU fell significantly in October and November – both for those months and for the 12 months previously.
The European figures were minus 7.1% and 8.8% respectively and the NZ figures down 6.5% and 5.5%.
By way of explanation, the GDU says volumes of NZ whole milk powder to China were down and in the EU it was fluid milk exports to China and cheese to Ukraine.
Regarding imports, Latin American countries had a strong appetite for milk powders and the Middle East and Africa received more cheese, skim milk powder, butter and whey.
China’s importations were down 7.2% in December, year by year, and 16.7% in the 12 months of 2022.
