Global Production on the Rebound
The U.S. Dairy Export Council posted its July export dashboard, providing a snapshot of global market trends. Here are a few highlights:
- Global production is rebounding. Looking at the milk production data, the EU was going gangbusters from mid-2013 through the first quarter of 2016. We saw what that did to the industry when prices crashed and limits were put on production. In 2017, it looks like the EU has rebounded and has posted year-over-year production gains throughout most of 2017. Where the EU ends up in terms of production totals will have a significant impact on global supplies and prices.
- Export percentages are steady. The U.S. has consistently exported 15 to 16% of total milk production. USDEC President and CEO Tom Vilsack said last month that the organization will strive to get the next 5% and move to 20% of total production. The challenge will come from growing global production that could drop prices and make the U.S. less competitive in export markets.
- Our cupboards are getting full. The trend lines showing stocks of powder, cheese and butter keep going up, meaning we have plenty of all products in storage. As production keeps increasing and cow numbers grow the industry will need to find a place for the additional milk.
For a closer look at the dashboard, click here.