Dairy markets around the world are facing a mixed bag of challenges and opportunities in 2024. While some countries are experiencing declines in production and exports, others are gearing up for growth and increased competitiveness. Let’s take a closer look at the dairy industries in Australia, New Zealand, the European Union, and Argentina to understand the key factors driving their outlook for the year.
### Australia: Labour Availability Key to Milk Production
In Australia, fluid milk production is expected to increase by 1% in 2024, reaching 8.5 million tonnes. This growth is attributed to the easing of beef cattle prices and improved labour availability. Despite ongoing challenges related to labour shortages, the return of working holidaymakers and record levels of workers coming in through programs like the Pacific Australia Labor Mobility scheme are helping to address this issue.
– What factors have contributed to the decline in milk production in Australia in recent years?
– How are strong farmgate milk prices influencing milk production in the country?
– What role do labour shortages play in the Australian dairy industry, and how are they being addressed?
The forecast for cheese production in Australia in 2024 is a 5% increase to 445,000 tonnes. Milk processors are redirecting their focus toward cheese production due to growing demand, both domestically and globally. Despite a projected 3% decline in skim milk powder production, cheese exports are expected to rebound significantly, driven by improved import demand from key markets like Japan, China, South Korea, and the Philippines.
### New Zealand Endures El Niño Weather Patterns
In contrast, New Zealand is expected to see a marginal decline in milk production to 21.2 million tonnes in 2024. Dairy farmers in the country are facing challenges such as El Niño weather patterns, lower farmgate milk prices, on-farm inflation, and a shrinking dairy herd, all of which are contributing to a less optimistic outlook for the year.
– How are external factors like weather patterns impacting milk production in New Zealand?
– Why is the dairy herd shrinking in the country, and what implications does this have for production?
Cheese production in New Zealand is forecast to remain stagnant in 2024, with cheese exports expected to decline due to increased competition from other dairy-producing countries like Australia and the EU. On the other hand, butter production is projected to increase by 3%, driven by a shift in milk volumes towards high-milk fat products. However, whole milk powder production is forecast to decline, leading to a 2% decrease in exports.
### The European Union’s Dairy Herd Reduction Challenge
The European Union is anticipating a marginal decline in milk production in 2024, with a reduction of 200,000 tonnes compared to the previous year. While there has been a modest improvement in cow productivity, it is not sufficient to offset the decline in the dairy herd. Persistent low farmgate milk prices and high production costs continue to put pressure on dairy farmers in major producing member states like Germany, France, Spain, and Poland.
– What strategies are being implemented in the EU to address the challenges faced by dairy farmers?
– How do government policies, such as nitrogen emissions caps and voluntary payment schemes, impact dairy production in the EU?
Despite weaker milk production, cheese production in the EU is forecast to increase marginally in 2024, with an expected uptick in domestic consumption and global demand driving this growth. On the other hand, butter and skim milk powder production and exports are expected to decline as processors focus more on cheese production in response to lower milk production and shifting demand dynamics.
### Argentina Faces Currency Devaluation Drawback
In Argentina, milk production is projected to decline by over 2% in 2024, dropping to 11.5 million tonnes. The country’s dairy industry is grappling with significant pressure on producer margins due to currency devaluation, which has increased the cost of feed and imported inputs. These cost hikes are likely to limit growth in output per cow in the upcoming year.
– How does currency devaluation impact the cost of production for dairy farmers in Argentina?
– What measures are being taken to mitigate the challenges faced by the dairy industry in the country?
Despite the challenges being faced by dairy markets globally, there are pockets of growth and opportunity for producers who can adapt to the changing landscape. By staying abreast of market trends, focusing on efficiency and productivity, and responding to consumer demands, dairy stakeholders can navigate the complexities of the industry and position themselves for success in the year ahead.
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