Global Market Overview of Milk

November 2023

The briefing examines how the milk commodity performs globally and in the largest countries in terms of supply and production. The report also provides data and analysis on milk price dynamics, as well as trends across key commodity consuming industries.

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This report comes in PPT.

Key findings

Milk production hindered by climate change

Milk production faces risks from climate change. Extreme weather events, such as droughts and heavy rainfall, ravage grazing lands. Rising temperatures also foster pests and livestock diseases, disrupting milk output, evident in the 2023 outbreak of Lumpy Skin Disease in India. A 2023 study in "Environmental Research Letters" warns that persistently high emissions could cause over one billion cows globally to suffer heat stress by the end of the century.

Improving feed and veterinary remains crucial for productivity growth in developing countries

Milk production in developing countries is expanding rapidly, yet yields remain lower than global standards due to factors such as inadequate feeding, veterinary services and the low genetic potential of cattle, which limits milk production. With growing dairy demand, governments are focusing more on animal health and genetic enhancements. In countries such as China, there's a shift towards promoting large-scale, modern dairy farms over smaller ones.

Rising competition from plant-based dairy alternatives

Increased awareness of food intolerances and dietary changes, coupled with escalating concerns about climate change and amplified advocacy for animal rights, are fuelling greater competition from dairy alternatives, adversely affecting the demand for traditional dairy products. Key players in the dairy industry are adapting by broadening their ranges to include plant-based alternatives. Global market for dairy free dairy products and alternatives is set to rise by almost a quarter in real terms over 2022-2027. 

Efforts to cut emissions can impede production growth

Livestock farms, significant contributors to greenhouse gas emissions, face stringent environmental regulations, especially in the EU, where initiatives such as Farm to Fork and changes in the Common Agricultural Policy are intensifying these pressures. Although these regulations increase operating costs and are slowing down milk production, they also open opportunities in markets such as organic milk, driven by heightened environmental consciousness.

Scope
Key findings
Key trends impacting milk market in 2023
Europe’s dominance is challenged by the push towards sustainable farming
Asia Pacific, now largely reliant on imports, is set to lead global milk supply growth
Market growth and government aid spur Indian producers’ efforts to increase milk supply
Lower profits are leading US farmers to shrink their herds, causing limited output growth
Chinese market expansion and the advancement of large farms are set to boost production
Milk prices are expected to fall with diminishing demand
Milk prices in the US are projected to see the largest decline by the end of 2023
Inflation hits short-term demand, yet growth in developing markets promises a robust future
Demand drivers for milk across key buyer industries
Dairy-free choices intensify rivalry, but innovative functional dairy sustains momentum
Sluggish retail expansion dampens dairy interest, with affordability and flexibility still crucial
Dairy demand dips in restaurants but rising comfort food trend boosts prospects
Top 10 country profile: India
Top 10 country profile: US
Top 10 country profile : China
Top 10 country profile : Brazil
Top 10 country profile : Germany
Top 10 country profile : Russia
Top 10 country profile : France
Top 10 country profile : New Zealand
Top 10 country profile : Pakistan
Top 10 country profile : Turkey
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