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23 October 2018



Future of milk production

Developing countries will catch up with developed countries in the milk production over the next 10 years

Milk production will grow at a slower pace over the next 10 years than in the past three years. This is evidenced by FAO and OECD forecasts. By 2026, it is expected to boost production by 22% (more than 170 mln tons) compared with 2014-2016 (806 mln tons in 2016).

Currently, developed and developing countries account for roughly equal shares in global milk production, but over the next 10 years, the market situation will change and developing countries will take on the leadership roles. It is expected that in 2026 developed countries will produce 44% of all milk, while developing countries will increase their share to 56%. Developing countries will raise their production by increasing the livestock number and herd productivity, thus, in ten years, the milk production will increase by 34% compared to 2014-2016. Developed countries will produce additional +10% milk. At the same time, the number of dairy cattle will decrease, but the milk yield will grow.

In recent years, the global milk market was dominated by developed countries. The biggest producer of the last year was the European Union with a global share of about 20%. The top 5 milk producers also include India - 19%, the United States - 12%, China - 5% and Pakistan - 5%.

In the next decade, there will be the active increase in milk production in developing countries. Mostly, this trend will affect Asia, especially India and Pakistan. According to FAO and OECD forecasts, India will show the highest growth, overtake the European Union and become the largest milk producer in the world. The share of this country will increase to 23% in 10 years, but the vast majority of products will be consumed domestically in the unprocessed form. Developed countries: the EU and USA, - will show more slowly annual growth rate compared to the last decade. Their shares on the world market will decrease from 20% to 18% and from 12% to 11%, respectively. However, they will remain the main players in the export markets for processed dairy products, namely butter, cheese, dried skim milk and dried whole milk.

“Over the next decade, developing countries will increase consumption of processed dairy products: dried milk and butter, which is associated with rising incomes in the countries of Asia and the Middle East, - commented Daria Grytsenko, analyst of agricultural markets of the Association “Ukrainian Agribusiness Club” - At the same time, the consumption of fresh dairy products will remain high, because developing countries will consume about 3/4 of the world's production of fresh dairy products.”

What trends are observed today in the export of domestically made agricultural products? What strategic markets will open for Ukraine in the near future and how to overcome the difficulties on the way to prospective consumer? Practical advices, successful cases of Ukrainian exporters and life hacks from leading experts - at the conference “Doing Agribusiness in Ukraine” (6 December, 2017).



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