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Report: Prospects for EU agricultural markets and income 2015-2025

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This month European Commission released the report: Prospects for EU agricultural markets and income 2015-2025. In the dairying part it states:

The current low prices for dairy commodities and milk are mainly the result of a surge in world and EU supply at a time when China has started to reduce its purchases and Russia has introduced an import ban. However, import demand from other regions of the world has risen significantly and is expected to grow steadily over the outlook period, driven by population growth and a change in diets in favour of dairy products. In addition, Chinese imports should resume growth.

Though lower than in the last decade, the expected 2 % annual increase in world imports and rising EU domestic demand for dairy products are expected to support an increase in deliveries of close to 1 % per year to 164 million t in 2025. The EU’s share of world exports should grow slightly, thanks to its considerable potential to increase production (unlike its main competitor, New Zealand, which is more constrained by the availability of natural resources). We also analyse the dairy outlook for the EU from the point of view of its impact on nitrates and green-house gas (GHG) emissions.

Milk prices are expected to recover to moderate levels in the short term, before increasing further to an average of EUR 360/t in the last five years of the outlook period, in line with expectations for world dairy–commodity prices. The world market should remain thin with only 7.5 % of dairy world production traded in 2025, so that the risk will remain high of short-term market imbalances.

Get the report

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