Even though worldwide milk output is expected to grow 1.9 percent by year's end, global dairy exports are projected to fall by 0.9 percent, noted the Food and Agriculture Organization (FAO) in the latest Food Outlook. While the growth in global milk production remained on pace with prior years, India was pegged to set the pace among all counties. Unfortunately, the country still has major issues getting milk safely from farm to consumer so it doesn't always translate to domestic consumption or export sales.
As the for the export front, global dairy trade could notch its first decline in many years due to prior sluggish output in the European Union and New Zealand. Together these two marketers account for 55 percent of world dairy trade, reported FAO which tracks food and agriculture on behalf of the United Nations.
Short dairy product supplies have translated into higher product prices. Whole milk powder prices were up 44 percent to $1,153 per metric ton; skim milk powder, up 26 percent to $906 per ton; butter up 32 percent to $1,166 per ton; and Cheddar cheese up 13 percent to $500 per ton. This analysis compared prices from October 2013 to the same time a year earlier and all weights are in metric tons.
Drilling down a bit deeper into the biannual report to take a look at major exporting countries: the U.S. was pegged to grow milk flow by 0.9 percent, while Europe could match its prior year production after a lag in the first half of the year. New Zealand, the world's largest dairy exporter, is currently having a great spring flush (Southern hemisphere) as timely rains recharged pastures for spring growth. As a result, Kiwi milk flow grew 6 percent this September compared to a year earlier. Meanwhile, neighboring Australia hasn't faired as well and milk flow was down 3 percent in the prior season and no growth in milk production was expected by FAO analysts.
