Global milk production is expected to rise this year, according to one of the world’s largest milk processors but few markets will see a pick up in demand.
FrieslandCampina has said that within Europe, there will be a marginal rise in milk production, even with a predicted decrease in Dutch supplies due to environmental restrictions.
The Dutch dairy says that the demand for dairy products in Europe will remain stable or stay on a slightly declining trend and demand for dairy will decline in Africa, the Middle East and South America.
Chinese demand for dairy, it predicts will increase slightly, and prices will fluctuate.
While it reported a slight increase in profits at €362m, FrieslandCampina, which processed 10.8 billion kilos of milk in 2016 from its 13,300 suppliers, has said it will increase in research and development by 10pc to improve its competitive position.
It also said that focused spending on advertising and promotion, of which increasingly more is spent on digital communications, will help grow its brands.
Roelof Joosten, Chief Executive Officer, said that 2016 was a turbulent year politically as well as for the European dairy sector.
He also warned that protectionism is increasing; with many countries trying to protect their own industry against international competition which was undermining free trade.
At home, it warned Dutch farmers that a substantial and quick reduction of the phosphate production is required to meet the European Union’s environmental requirements to qualify for a nitrates derogation. Farmers who fail to make the necessary adjustments to meet certain measures will be penalised.