USDA: global milk production grows by 1.6% in 2019 - price increase in the second half of the year.
The bi-annual publication of the US Department of Agriculture's Global Milk Market estimates production growth of 1.6% in 2019 . It is expected to increase by 0.9% in the major EU producing regions, by 1.3% in the USA and by 5.3% in India . In these countries, approx. produced two-thirds of the milk quantities recorded.
The increase in milk yield results in the first line of higher benefits per cow . The exception is India , which, with an average of 1,350 kg per cow, benefits essentially from the increase in cow numbers.
Fresh milk consumption, with a share of 35%, is expected to rise by 1.05% on average worldwide.However, in the EU, the US and other industrialized countries , fresh milk consumption has been falling for years. On the other hand, the rising supply of milk in developing countries is mainly moving into immediate direct consumption. Typical of this is India , which is responding to its 5.3% milk increase with a + 4.5% fresh milk consumption.
At 20.7 million tonnes, cheese is one of the most widely used milk processing products. The USDA estimates that global production and cheese consumption will increase only marginally in 2019. The largest producers and consumers are the EU with a share of 50% and the US with 25% .World trade in cheese is on the export side led by the EU with an increasing share of 45% . The second largest position is shared by the USA and New Zealand, each with approx. 15.5%.
Worldwide butter production estimates the USDA by approx. 3% higher. More than half of global butter production and consumption is increasingly occurring in India . The EU contributes with an increasing 25% share of global butter production.
In 2019 , the USDA expects butter exports to increase to 885,000 t . However, the earlier average volumes of 930,000 t have not yet been reached. The butter export trade is led by New Zealand with a share of almost 60%. A renewed increase in EU exports reaches just under 20%. Cheese imports are spread over many small countries. The formerly high import share of Russia is increasingly decreasing.
Global skimmed milk powder production is expected to increase by 2.5% in 2019. The leading producers are the EU with 38% market share, the USA with 21.5% as well as New Zealand and India with approx. 12% . The consumption increase estimates the USDA at approx . 3%. The EU, New Zealand and the US are the largest exporters with a combined market share of 80%.On the import side there are many small import regions. Mexico, China, Algeria, the Philippines and Indonesia are in the lead. In all import regions, import increases are expected in 2019.
In the whole-milk powder sector, New Zealand dominates with a steady production share of 30%, followed directly by China with little changed 27%. The EU plays only a secondary role with rising 740,000 t, of which again increasing 370,000 t are sent to export. New Zealand dominates VMP export with a trading share of 68%. New Zealand's exports focus on sales in China , which should increase its imports by 9% to 500,000 tonnes. Algeria, the second largest importer and consumer of EU goods, is also expected to increase its imports of VMP by almost 4% .
The world's rising milk production is offset by increasing domestic consumption and rising exports. In some market segments, inventories are even reduced. Milk prices may stabilize at the current level in 2019.
The futures prices on the Chicago Stock Exchange show an uptrend until Sep. 2019 with price increases for class 3 milk from Jan with 27.5 to 32 € / 100 kg in Sep.2019 . The CME butter prices show an increase of approx. 5.5% off . Cheese prices will increase by 18% from Jan to Sep.2019 . The MMP prices are traded 14.5% higher in Sep.2019 than on the Jan. 19 delivery.
At EEX in Leibzig , butter traded at € 4,351 / t in Jan-19; for Sept.2019 the prices stand at € 4,625 / t . The MMP courses in Jan. 2019 are € 1,811 / t and are quoted at € 1,893 / t for the Sep. 19 date.
