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Global Milk Output Expected To Rise 1.7% A Year Over Next Decade

World milk production is expected to grow at 1.7 percent per annum over the next decade, faster than most other main agricultural commodities, according to the OECD-FAO Agriculture Outlook, which was released Monday in Rome.

The report presents a baseline scenario for the evolution of agricultural commodity markets at national, regional and global levels over the coming decade. Projections in the report are developed by OECD and FAO in collaboration with experts from member countries and international commodity bodies.

In almost all regions of the world, yield growth is expected to contribute more to milk production increases than herd growth, the report said.

The contradicting world average observation of a larger growth of herds (1.2 percent per annum) than average yield growth (0.4 percent) is due to herds growing faster in countries with relatively low yields, the report explained.
India and Pakistan are especially important for milk production, and are expected to contribute to more than half of the growth in world milk production over the next decade. They are also expected to account for more than 30 percent of world milk production in 2028.

Milk production in the European Union (EU) is projected to grow more slowly than the world average over the next decade. The EU’s medium-term growth is due to a small increase in domestic demand as well as an increase in global demand for dairy products.

Growth in EU milk production will stem from an increase in milk yields, which are projected to grow at 1.1 percent per annum over the next decade. Dairy herds are expected to go on a declining trend again (down 0.5 percent per annum) following an increase in the early years of the projection period in response to the abolition of milk quotas.

The highest average yield per cow is expected to occur in North America as the share of grass-based production is low and feeding is focused on high yields, the report said. Cow herds in the US and Canada are expected to remain largely unchanged and production growth to originate from further increases of what are already high yields.

New Zealand is the most export-oriented milk producer and has seen substantial recent milk production growth, the report noted. The main constraining factors for New Zealand’s continued growth are land availability and increasing environmental restrictions. A change to a more feed-based production, as opposed to grass-based, is nevertheless not expected.

It is anticipated that less than 30 percent of global milk production will be further processed into products such as cheese, butter, skim milk powder, whole milk powder, or whey powder. Most milk is consumed in the form of fresh dairy products. Cheese and butter have considerable direct food demand, especially cheese, and they currently account for a large share of
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