It is predicted that global milk production will increase overall in 2023, despite a slight decline in the second half of the year.
According to Rabobank’s latest estimates, milk production in key producing regions is expected to grow by 0.7% year-on-year in 2023, which is a decrease from the previously published 1% growth figure.
The growth is limited by increased culling in the US, unfavorable weather conditions in New Zealand, Brazil, Argentina, and lower milk prices in the EU.
In the US, milk production is forecasted to grow by 1.1% in 2023, and higher yields will be needed to achieve the overall increase in production due to recent culling.
Milk deliveries in the EU and UK are expected to be up by around 1.2% year-on-year for Q1 2023. In Brazil, supply is forecasted to increase by 1.5% in H1 2023, while other South American regions are likely to see reduced production.
Milk production in New Zealand is expected to contract by around 1.5% for the 2022/23 full season, and no growth is likely to occur in Australia until at least 2024.
China is also expected to have lower production in 2023.
Demand for milk is expected to be lower in 2023 due to a gloomy global economic outlook, with household consumption deteriorating due to increasing inflation. In China, import demand is likely to remain sluggish until Q3 as they have ample stocks. However, there has been some improvement in imports following the end of its zero-Covid policy.
Due to sluggish demand and improved milk production in the major producing regions, milk prices are likely to ease in the near to medium term. Production growth will continue to be limited by higher costs of production and labor shortages. The longer-term forecast is uncertain due to the uncertain macro-economic scenario, tighter farm margins, and lower consumer spending.