Commodity watch by policy officer Andrew Robinson
Forecasts indicate that global milk production in 2024 is up 1.5% to 981 million tonnes, with supply volumes having improved across the largest dairy export regions. It is expected that 2025 will see further growth across the seven key exporting regions, with early forecasts suggesting growth of 0.8% on 2024 volumes.
For 2025, EU production is expected to reach 155 million tonnes, up 0.6% on 2024. With a decade of decline expected to follow, forecasts indicate a decrease of 1.8% by 2035 with production estimated at 151.3 million tonnes, attributed to by environmental policies which could reduce the dairy herd by 11% from the 2022-2024 average and increased yields no longer able to make up for the steady contraction of the EU dairy herd.
Across the UK volumes continue to increase, with Northern Ireland’s contribution to UK volumes up 10% on last year. Northern Ireland is set to top 2.6bn litres this calendar year 1.3% more than in 2023. A record high and an increase of 13.2% from 2015 levels, when the milk quotas were abolished. According to the agricultural census cow numbers in Northern Ireland as of June 2024 were up 2% on last year at 325,325. September production in 2024 from NI farms was 183.45 million litres, up 4.8% from September 2023 production.
Farm gate prices have been mostly favourable throughout 2024 helping to deliver growth. Data from DAERA indicates that the average farmgate price for milk in September, including retrospective bonuses was 44.2 ppl, 13.2 ppl higher than in September 2023.
Growing milk supplies combined with better coverage have eased pressure on commodity prices for fats through December with sellers and buyers at an impasse on prices, buyers showing caution on higher pricing and sellers not willing to negotiate lower due to a strong milk price.
