Milk production in the world will grow by about 1.7% per year until 2030

In 2020, according to FAO calculations, milk production in the world increased by 1.4% to 861 million tons (according to IFCN calculations, milk production in the world increased by 3% to 889 million tons in 2020). According to FAO, milk production in the world will grow primarily due to livestock, the average growth of livestock will be 1.1% per year, milk yields will grow by an average of 0.7% per year.

In 2020, milk production continued to grow in the EU and the US, but due to the heat, it decreased slightly in New Zealand. In China, milk production in 2020 increased by 6.6%, but the import of dairy products remained significant. FAO analysts believe that milk production in the EU will grow slower than the global average until 2030, livestock will decrease by an average of 0.5% per year, and milk yield will grow by 1% per year. In the USA and Canada, the livestock will remain approximately at the same level in the next 10 years, and milk production will grow due to an increase in milk yields. In New Zealand, the growth of milk production in the next decade will be very modest. At the same time, milk production in Africa will grow, mainly due to the growth of livestock, by 2030, a third of the world's livestock will be in Africa, but its share in milk production will be just a little more than 5%.

Milk consumption in developed countries will grow from 23.6 kg of dry matter per capita in 2018-2020 to 25.2 kg of dry matter by 2030, in developing countries consumption will grow from 10.7 to 12.6 kg of dry matter. In developed countries, the consumption of butter, cheese and milk powder will increase, in developing countries, more than 75% of the average per capita consumption will be the fresh category, but the share of fresh dairy products will vary depending on the region, from 99% in Ethiopia to 0.5% in the Philippines.

Butter production will grow rapidly, +1.9% per year due to high demand in developing countries and China. The production of other exchange-traded products will grow at a slightly less rapid pace, for example, cheese and skimmed milk powder +1.2% per year, whole milk powder +1.4% per year. However, most of the milk will be consumed in the world in the form of fresh dairy products, largely due to the growth of consumption of this category in India and Pakistan. The consumption of fresh dairy products in the world will grow by about 1.2% per year.

According to FAO analysts, China will remain the largest importer of milk despite the growth of domestic production, and Japan, Southeast Asia, Russia, Mexico, the Middle East and North Africa will also remain major importers of dairy products. In addition, the EU's agreements on free trade zones with many countries will contribute to the growth of trade in dairy products. At the same time, Brexit will create difficulties in trade relations between the EU and the UK, and a new trade agreement between the US, Mexico and Canada will give advantages both in North America and in Mexico to US suppliers. Countries such as Argentina and Chile can increase their influence as exporters of whole milk powder and skimmed milk powder on the world market. Moreover, the entry of India and Pakistan into the world arena as active players can have a serious impact, now they are practically self-sufficient in milk and do not participate much in the world trade in dairy products.

The three largest exporters of dairy products (the EU, the USA and New Zealand) will collectively supply 62% of world cheese exports, 70% of whole milk powder and 83% of skimmed milk powder by 2030. Australia's share in world exports will decline, although the country will remain an important exporter of cheese and skimmed milk powder. The share of Argentina in the export of whole milk powder will grow to 5%.

And a little bit about the dynamics of prices for dairy products. Since 2015, prices of butter have sharply gone up due to increased demand and the gap in prices for butter and skimmed milk powder has grown, in 2017, prices of butter reached a peak, then a slow decline began.

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