In its recently-published report Prospects for Agricultural Markets and Income in the EU 2012-2020, the EU concludes that medium term prospects for milk and dairy products appear favourable due to the continuing expansion of world demand.
Global population and economic growth, and increasing preference for dairy products are expected to be the main drivers, fuelling EU exports and sustaining commodity prices. The best export performance is shown by cheese and SMP, whose exports over the outlook period would expand by two thirds and triple respectively.
Milk production is projected to continue increasing from 2012 onwards, at a moderate growth rate. Aggregate EU production would remain below the potential growth rate provided by the gradual elimination of the quota regime. EU milk production is projected to reach 159.3 million tonnes in 2022, accounting for a cumulative increase of 5% since 2011.
Cheese output is seen to grow by almost 7% on aggregate from 2011 to 2022, reaching 9.6 million tonnes by the end of the outlook. Consumer preference towards fresh dairy products, in particular drinking milk, cream and yogurt, would sustain an expansion in production up to 49.6 million tonnes in 2022 (+8% compared to 2009 and +6.3% compared to 2011) EU skimmed milk powder production is projected to increase by 23% throughout the outlook to reach around 1.3 million tonnes in 2022; Exports would reach 678 000 tonnes by the end of the outlook (30% more than in 2011). Total butter production is expected to remain constant in the short run, and to recover in the years soon after the quota expiry, reaching 2.4 million tonnes in 2022 (+8% with respect to 2011).