Post-quota EU milk surge likely to exceed 10bn litres
Published 18/09/2013 | 05:00
Farmers in Germany, France, Ireland and Poland will produce a massive 10bn litres of extra milk between 2015 and 2020 once the quota shackles are removed.
The increase is equivalent to twice the amount of milk Ireland currently produces in a year.
But the huge wave of additional milk is not expected to crash the market, according to dairy analysts at Dutch firm Rabobank.
Speaking at the Agricultural Science Association (ASA) conference in Waterford on Thursday, dairy market analyst Matthew Johnson said EU milk production was likely to rise by 7-8pc between 2015 and 2020.
However, demand for dairy globally is expected to grow by 2.4pc per year and that growth would be dominated by developing markets that are milk deficit regions.
"Demand growth of 2.4pc would equate to around 13-14bn litres of milk so there is definitely scope for the extra milk to be soaked up," Mr Johnson told 350 delegates at the conference.
In the shorter term, Rabobank, which deals with 90pc of Dutch dairy farmers, is using a forecasted milk price of 33c/l in its projections but this is "being discussed avidly".
Mr Johnson said the bank expected "deflation" rather than substantial reduction in milk price in first half of 2014.