Wednesday, 04 December 2013 08:16

EU milk tipped for global market

Written by 

THE END of milk quotas in Europe from 2015 will add another dimension to the global milk supply, says Fonterra chairman John Wilson.

Wilson told Dairy News there are differing views on whether milk supply out of Europe will increase once quotas are lifted.
Given that EU's milk consumption is relatively stagnant, he believes increased production from the bloc will end up in the global market to meet growing demand.

He says Fonterra's joint venture with Netherlands-based A-ware Food Group is an example of the co-op tapping into the changing EU dairy environment.

Fonterra and A-ware Food Group are developing a new cheese plant and dairy ingredients plant in Heerenveen in the north of the Netherlands. A-ware will operate a cheese plant and Fonterra will operate a dairy ingredients plant alongside it.

Cheese will be produced for A-ware's customers in Europe and the whey and lactose produced will be processed into premium nutrition dairy ingredients for Fonterra's global customer base. A-ware will be sourcing milk from Dutch farmers, who are expected to ramp up production when the milk quotas go. Wilson says this could add another billion litres of milk to Fonterra's global pool.

Wilson expects global growth in milk production to be 0.5% higher than a year ago.
Global dairy demand is forecast to grow by 120 billion L by 2021, 40 billion L of that in freely traded markets – largely the emerging markets. New Zealand is expected to see 2% or 3 billion L growth during the same period.

Wilson says this highlights the importance of Fonterra's strategy to support New Zealand milk by ensuring access to global milk pools so we can accommodate demand growth.
Current global demand for milk products is growing at just over 2% per annum. In China, demand is expected to grow 7% by 2020 – but milk supply will grow by only 4%.

China's dairy industry is changing rapidly, with evidence this year of consolidation at the farming and manufacturing levels of the supply chain, says Wilson.
Forecasts predict a modest recovery in global milk production, with some early signs evident.

Key Southern Hemisphere exporting countries Argentina, New Zealand, and Uruguay are seeing small growth. Australian milk production remains down on last season. In the USA, with lower grain prices, milk supply is tipped to increase.

- By Sudesh Kissun 

More like this

Winston's crusade

OPINION: A short-term sugar hit. That's what NZ First leader Winston Peters is calling the proposed sale of Fonterra's consumer and associated businesses.

Featured

Carrfields invests in new Ashburton R&D hub

The Ashburton-based Carrfields Group continues to show commitment to future growth and in the agricultural sector with its latest investment, the recently acquired 'Spring Farm' adjacent to State Highway 1, Winslow, just south of Ashburton.

Elite sheep dogs to go head-to-head at Ashburton A&P Show

A major feature of the Ashburton A&P Show, to be held on October 31 and November 1, will be the annual trans-Tasman Sheep Dog Trial test match, with the best heading dogs from both sides of the Tasman going head-to-head in two teams of four.

National

Machinery & Products

New pick-up for Reiter R10 merger

Building on experience gained during 10 years of making mergers/ windrowers, Austrian company Reiter has announced the secondgeneration pick-up on…

Krone EasyCut B1250 fold

In 2024, German manufacturer Krone introduced the F400 Fold, a 4m wide disc front mower, featuring end modules that hinge…

» Latest Print Issues Online

Milking It

Microplastics problem

OPINION: Microplastics are turning up just about everywhere in the global food supply, including in fish, cups of tea, and…

Job cuts

OPINION: At a time when dairy prices are at record highs, no one was expecting the world's second largest dairy…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter