Further expansion of EU milk production to be expected in 2017 and 2018, according to a recent report by the European Commission.
In 2017, it says milk collection is projected to be 0.6pc above 2016.
However, in the first quarter, it is expected to be below the high levels of 2016, particularly because there is one day less in February2017.
In spring, the Commission says EU milk collection should close the gap on last year and, if raw milk prices remain stable, a significant increase can be expected in the second half of 2017.
This change is expected to go hand in hand with a yield increase of 2pc to 7065 kg/cow and a herd decline of 1.6pc.
The herd decline is projected to be greater in the Netherlands to comply with the phosphates legislation.
In 2018, the Commission says there might be room for a larger increase in EU milk production, especially if world demand keeps rising and if the Russian import ban is removed.
Meanwhile, the Commission confirmed that the reduction in the EU milk supply at the end of 2016 contributed to a significant recovery in EU milk prices.
Exports and domestic demand led to record high prices for butter and a significant price recovery for cheese.
By contrast, the skimmed milk powder (SMP) price is expected to remain around current levels given the high stock levels and that the seasonal peak of milk collection is still to come.