The Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) recently released the Agricultural Outlook 2024-2033. The dairy industry outlook section (hereinafter referred to as the Report) analyzed in details the price, production, consumption and trade development of dairy products from 2024 to 2033, and explores the important risks and uncertainties that may affect the global dairy market in the next decade.

Global milk production will increase

The Report predicts that global milk production will grow at an average annual rate of 1.6% between 2024 and 2033, reaching 1,085 million tons by 2033. 81% of this will come from cow's milk, 15% from buffalo milk, and 4% from goat, sheep and camel milk.

As the world's second largest milk production region, the EU's milk production will drop significantly. According to the Report, this is mainly due to demand attraction, environmental policy restrictions, and the expansion of organic and pasture farming systems. Among them, the growth in Oceania is particularly slow, partly due to environmental restrictions and the impact of the expansion of organic production systems.

The growth in global milk production is mainly due to the increase in milk production per cow, especially in North America, where milk production per cow is much higher than the global average. It is expected that this trend will be gradually realized in the global dairy industry in the future by optimizing dairy production systems, improving animal health and feed efficiency, and improving genetic genes.

Asia leads dairy consumption

The Report predicts that global dairy consumption will grow in the next decade as income and population increase, especially in Asia, where India and Pakistan will continue to lead the growth in consumption of fresh dairy products.

By 2033, per capita fresh dairy consumption is expected to reach 25 kg in India and 45 kg in Pakistan. This growth is mainly driven by income and population growth. In high-income countries, such as Europe and North America, cheese consumption is expected to continue to grow. In these regions, consumer demand for cheese stands out. In addition, butter consumption is expected to level off in the EU and North America over the next decade as consumers gradually shift to a low-fat diet.

The Report predicts that by 2033, global dairy trade will grow by 12% to 13.9 million tons. Among them, the three major regions and countries - the European Union, New Zealand and the United States will continue to dominate the global dairy export market. By 2033, the above regions and countries will occupy 65% of the cheese export market, 70% of the butter and whole milk exports, and 80% of the skim milk exports. New Zealand remains the world's major exporter of butter and whole milk powder, and is expected to occupy 45% and 60% of the global butter and whole milk powder markets respectively by 2033.

Among the major importing countries, China will continue to maintain its position as the world's largest importer of dairy products. In recent years, Oceania, the main source of dairy products, has gradually increased its imports and exports of butter and skimmed milk powder to China. With the rapid growth of demand for dairy products in Africa, the region will become an important market for dairy imports in the future, especially in terms of demand for whole milk and skimmed milk.

In 2023, global dairy prices fell sharply from their historical highs in 2022 due to lower input costs and reduced global consumption, and are expected to gradually recover and rise slowly over the next 10 years.

The Report suggests that stricter environmental legislation around the world, especially in countries where greenhouse gas emissions from dairy production are increasing, could have a significant impact on future dairy production. The legislation will prompt the dairy industry to adopt new solutions.

Extreme weather events and animal disease outbreaks triggered by climate change, particularly in areas with dense dairy farming, could have significant impacts on the global dairy industry.

In addition, China, as the world's largest importer of dairy products, is expected to continue to import large quantities of dairy products.

Source: China Food Newspaper

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