Milk market 2021: Production increases by 1.3% - China dominates world trade - EU benefits The most recent semi-annual publication by the US Department of Agriculture (USDA) estimates cow milk production in major countries to rise by 1.3% to 541 million tonnes in comparison the previous year. Fresh milk consumption is expected to increase by 1.5% to 193 million t. Butter consumption is estimated to be + 2.8% higher, skimmed milk powder consumption is expected to rise by 3.9%, consumption of cheese is estimated to be 2.5% higher and sales of whole milk powder are increasing by an impressive 7.1%. Greetings from China. After the moderate development in the previous year, international prices for milk and milk products are showing an upward trend, which is currently being overshadowed by the summer weakness that is typical of the season. The highest rates are achieved in Oceania, while the lowest are observed in the US. The EU quotes are in the middle of the field.However, the EU-27 as the world's largest production area only achieved an increase of +0.6% to 158 million t. Butter production falls by -0.8%, skimmed milk powder (SMP) by -3.3% and whole milk powder by as much as -4.2%. In contrast, cheese production grew by + 2.2%. The average EU milk payment prices have been around 35 ct / kg since the beginning of the year with monthly fluctuations, and recently with an upward trend. In the second largest production area, the USA (103 million t), an increase in milk production of + 2.2% was determined, which is caused by increasing numbers of cows and milk yield. Drinking milk consumption continues to fall in line with the trend. On the other hand, cheese consumption remains on the rise at + 3.2%. The US even has to import cheese to meet demand. In the case of skimmed milk powder, however, the excess production continues to increase. MMP exports will increase to over 70% of US production. Whole milk powder does not play a significant role in the USA. After the strong Covid-related turbulence, the milk prices have increased with price fluctuations between the equivalent of 27 to 55 ct / kg until January.-21 stabilized again at a current level of 38 ct / kg. The upward trend is still ongoing. India as the third largest cow milk producer with 96 million tonnes (excluding buffalo milk) remains self-sufficient with an unusually low + 2.3% milk production (more than 5% is common). Around 90% of the milk is consumed fresh. The Covid pandemic is slowing down the Indian dairy industry considerably. Despite a + 4% increase to 34.5 million t, China's dairy industry is not making any significant progress in terms of demand. The fresh milk, which has risen to 14 million t, is almost exclusively consumed directly in the main production area of the low-yield north and west of the country. Whole milk powder production is declining. Skimmed milk powder production plays a subordinate role. Butter production stagnates and cheese production only increases slightly. But Chinese imports are huge: skimmed milk powder imports are up 43% and 31% of world trade, respectively. Whole milk powder imports achieve increases of 28% or more than 60% share of world trade. Even imports of butter decrease by 22% or29% share of world trade. Cheese is also becoming increasingly popular in China: imports rise by around 40% and reach 11% of world trade. The main supplier is New Zealand. The world's largest exporter of dairy products, New Zealand , exports around 95% of its 22.4 million t milk production in the form of processed goods. The double island in the South Pacific accounts for 71% of world trade for whole milk powder and 51% for butter, and ranks second behind the EU-27 for skimmed milk powder and cheese, each with a 16% market share. The New Zealand milk prices are converted at 34 ct / kg; For New Zealand conditions with year-round grazing with almost no concentrate, this is considerably above average. But the EU-27 is also involved in the China business with significant amounts. The deliveries of butter and cheese in the months Jan.-Ap. Increased by 120% each in 2021. Whole milk powder exports to the Middle Kingdom rose by 30% and for skimmed milk powder it was 18%. Every ton of export relieves the EU internal market and provides price support.
