Learn how the recent spike in European milk output affects dairy farmers. What can you do to stay ahead in this changing market? Find out more.
Summary: European milk production surged in June, marking the fifth straight month of growth. Despite strong performances in France, Poland, and Italy, declines in the Netherlands and Ireland balanced these gains. Globally, major dairy exporters saw an overall drop for the 11th consecutive month due to setbacks in Argentina, the U.S., and New Zealand. June’s output hit 12.7 million metric tons or 28 billion pounds, the highest year-on-year growth since May 2023. Germany maintained steady production, while France saw a 2.9% rise. Poland and Italy grew, but the Netherlands and Ireland faltered. High temperatures and an outbreak of blue tongue disease have recently stifled Western European production. These issues and a tight U.S. milk supply have driven dairy product prices up. For businesses, this means adjusting to potentially lower global milk prices, which could reduce feed costs and milk prices. Higher output could open up new collaborations and markets, with increased demand in Asia and the Middle East.
Europe’s milk output rose for the fifth month, hitting 12.7 million metric tons in June.
France, Poland, and Italy saw significant gains, while Germany’s production remained steady.
Declines in the Netherlands and Ireland tempered these gains.
Global dairy exporters faced an 11th consecutive month of overall production drop despite European growth.
High temperatures and blue tongue disease have recently impacted Western Europe’s milk production.
U.S. dairy markets experienced increased prices due to tight milk supply and European solid performance.
Dairy farmers must adjust strategies for future price fluctuations and global supply issues.
Milk production is surprisingly increasing throughout Europe, breaking traditional seasonal tendencies. But what does this imply for your farm and the more significant dairy industry? Despite a wet spring, the EU saw a substantial rise in milk production in June. Changing weather, disease outbreaks, and evolving market dynamics all impact milk production. The USDA’s Dairy Market News notes that “hot weather in France, Germany, and the Netherlands has stifled milk production and component levels.” Additionally, blue tongue illness influences the Western European milk supply. Despite a constrained milk supply, the US dairy market is growing, and there is a balance between European growth and setbacks in other key dairy exporters, such as Argentina and the United States. Understanding these trends is critical for any dairy farmer who wants to remain ahead of the curve. Ready to delve further into this developing story? Let’s get started.
June’s Record-Breaking Numbers
In June, European milk collections totaled approximately 12.7 million metric tons or roughly 28 billion pounds. That is a 0.9% gain over the previous year, the most substantial year-on-year growth since May 2023. This spike comes after a slow spring, marking a significant milestone for the EU-27 dairy industry.
Country
June 2023 (Metric Tons)
June 2024 (Metric Tons)
Change (%)
Germany
3,100,000
3,100,000
0.0%
France
2,650,000
2,725,850
2.9%
Poland
1,100,000
1,115,000
1.4%
Italy
950,000
980,000
3.2%
Netherlands
1,670,000
1,655,300
-0.9%
Ireland
1,230,000
1,215,000
-1.2%
Others
2,900,000
2,910,000
0.3%
Country-Specific Insights
Germany, the world’s largest milk producer, kept production consistent with the previous year. Meanwhile, France, the second-largest manufacturer, had a significant 2.9% rise. Poland and Italy also recorded substantial growth, offsetting falls in the Netherlands and Ireland. These country-specific patterns are critical to understanding the overall market dynamics.
Strategic Insights for Adapting to European Milk Output Changes
Have you considered how the increase in European milk production may affect your day-to-day operations? The rise presents possibilities and problems you cannot afford to ignore.
An increase in European output may put downward pressure on global milk prices. While this may imply reduced feed and input costs for your business, it may also lower milk prices. Keeping an eye on market developments will be essential.
The increase in output may open the path for new collaborations and international markets. Look beyond your boundaries; high-quality dairy products are becoming more popular in Asia and the Middle East. So, what will be your strategy? Adapt, innovate, and grasp opportunities while facing difficulties front-on.
While Europe saw growth, other major dairy exporters encountered difficulty. Argentina and the United States had considerable setbacks, while New Zealand saw a modest year-over-year decline. The five top dairy exporters fell 0.1% from last year’s output, marking the 11th straight monthly fall. This global perspective is vital for understanding the larger picture.
Weather and Disease: The Double Whammy
Since June, increasing temperatures have caused a decline in milk production on both sides of the Atlantic. According to the USDA’s Dairy Market News, hot weather in France, Germany, and the Netherlands has reduced milk output and component levels. An epidemic of blue tongue disease has also affected productivity in Western Europe. These causes are reducing dairy product inventories and raising prices.
The Bottom Line
So, what are the takeaways from all of this? The increase in European milk output and worldwide production constraints have resulted in a dynamic and potentially profitable market. Monitor weather patterns and disease outbreaks, which may immediately influence supply and pricing. Be aware and agile to capitalize on market trends. What tactics will you use to navigate these changes? It might be critical to your dairy farm’s survival.
Prepare to be amazed by the U.S. dairy cows breaking and shattering milk production records. Curious about their secrets and what it means for global demand? Keep reading.
Summary: Have you ever been intrigued by the fierce competition among top-producing states in the U.S. dairy industry? This competition has led to a significant increase in milk production, with the average U.S. milk cow producing 63% more milk in 2023 than in 1990. Michigan, a key player in this competition, leads in efficiency. The U.S. dairy industry has become a global powerhouse, with increased per-cow output and butterfat levels. Over the past decade, U.S. dairy cows saw per cow output rise by 11%, from 21,722 lbs. in 2013 to 24,117 lbs. in 2023. Michigan tops the nation, producing 27,564 lbs. of milk per cow per year, an 81% increase since 1990. Advanced technology, genetic selection, and artificial insemination have led to healthier cows producing more milk, driving cash revenues to an expected $42 billion in 2022, up from $35 billion in 2013.
Michigan leads the nation in milk production per cow, with an 81% increase since 1990.
The average U.S. milk cow produced 63% more milk in 2023 compared to 1990.
Butterfat levels in U.S. milk have significantly improved, contributing to increased dairy output.
Top-producing states include Texas, New York, Wisconsin, and Idaho, with Texas leading in 2023.
Advanced technology, genetic selection, and artificial insemination are critical drivers of increased efficiency.
U.S. dairy cows saw an 11% rise in per-cow output over the past decade.
The U.S. dairy industry’s efficiency has made it a global powerhouse, with notable increases in cash revenues.
U.S. dairy cows, milk production, per-cow output, fat content of milk, butterfat level, milk cow, milk production efficiency, Michigan, Wyoming, Colorado, Texas, New York, Wisconsin, Idaho, milk yields, United Kingdom, Argentina, European Union, China, dairy farming innovations, advanced technology, milking machines, automated feeding systems, precision agricultural equipment, labor expenses, productivity, genetic selection, artificial insemination, healthier cows, cash revenues, dairy sector.
Over the past decade, the U.S. dairy industry has experienced a significant surge in milk production, marking a period of remarkable growth and transformation. Dairy cows have broken new milk production records, with the per-cow output increasing by an impressive 11%, from 21,722 lbs. in 2013 to 24,117 lbs. in 2023. This surge in production is not limited to the quantity of milk. Butterfat production in the United States has also seen a substantial increase of 23%, with the average butterfat content rising from 3.76% in 2013 to 4.11% in 2023. These consistent advances in efficiency have resulted in the typical U.S. milk cow producing 63% more milk in 2023 than in 1990. This unprecedented growth underscores the transformation of U.S. dairy farming, making our cows some of the most productive in the world. But what is the key to these extraordinary accomplishments, and how have American dairy producers remained ahead of global competition? Let’s delve into this record-breaking trend and explore the methods that produce these incredible outcomes.
Location
Average Milk Yield per Cow (lbs.)
% Increase Since 1990
Michigan
27,564
81%
Wyoming
26,000
100%
Colorado
24,000
51%
Texas
25,500
70%
Wisconsin
25,400
65%
Canada
23,900
Not Available
United Kingdom
19,000
Not Available
Argentina
17,000
Not Available
European Union
16,000
Not Available
China
11,000
Not Available
New Zealand
10,000
Not Available
The Golden Era of U.S. Dairy Farming: A Decade of Unparalleled Efficiency
The last decade has been nothing short of transformative, inspiring American dairy producers to reach new heights of efficiency. Have you ever wondered how much more efficient contemporary dairy farming has become? Let’s look at some incredible data demonstrating the nationwide growth in milk production efficiency.
In only ten years, per-cow milk production increased by 11%, with the typical dairy cow producing 24,117 pounds of milk in 2023, up from 21,722 in 2013. Such significant increases do not end there. The fat content of milk—an important indication of quality—has also increased significantly. The average butterfat level in U.S. milk grew from 3.76% in 2013 to 4.11% in 2023, representing a 23% increase in total butterfat production.
Think about it. What exactly does this imply for the industry? This means that dairy producers may now produce more and higher-quality milk with fewer cows using innovative procedures and technologies created and perfected over time. These numbers highlight a remarkable trend of increased efficiency and production, establishing a new standard for dairy farming throughout the globe.
State-by-State Breakdown: The Top Performers in Milk Production
Let’s look at the top milk producers in each state. Michigan has taken the top rank in terms of production. Michigan’s dairy cows produce an astonishing 27,564 pounds of milk per cow per year, representing an 81% increase since 1990. This gigantic tower exemplifies the state’s continuous pursuit of efficiency.
Wyoming is just a little behind, and it is also seeing remarkable development. Despite being a minor player, Wyoming’s handful of dairy cattle have improved their game by more than tripling their milk supply since 1990, achieving second place. Colorado isn’t slacking either; the state ranked third with a 51% increase in milk output over the same time.
The battle for fourth place is fierce among several central dairy states. Texas, for example, leads with yields surprisingly close to those of other heavyweights like New York, Wisconsin, and Idaho, averaging roughly 25,500 pounds per cow annually. However, the Lone Star State edged the competition to take the top spot in 2023.
Each state provides something unique, yet all are dedicated to pushing the limits of dairy efficiency. These states are boosting the dairy business in the United States to new heights by combining innovation, innovative technology, and a never-ending pursuit of progress.
How Do U.S. Dairy Farms Stack Up Against Their International Counterparts?
How do U.S. dairy farms compare to their overseas counterparts? Let’s look at the data to discover why milk production in the United States is the industry gold standard.
Dairy cows in the United States are outperforming all other countries regarding milk production. In 2023, cows in the United States produced an average of 24,117 pounds of milk each year. In contrast, Canadian dairy cows generated 3% less milk while being the second most efficient globally. This implies that each cow in the United States produced around 724 pounds of extra milk yearly.
Looking farther out, the margin of advantage becomes much more enormous. The United Kingdom ranked third, behind by a considerable 24%, implying that its cows generated around 5,788 lbs. less milk per head. Argentina has significantly lower yields, behind the United States by 30%. Argentine cows generate around 7,235 kg. Less milk is produced per cow each year.
The European Union, a significant participant in the global dairy market, also lagged. With 34% lower yields than U.S. cows, this equates to an annual deficit of around 8,200 pounds per cow. Moving to Asia, China’s dairy farming innovations have yet to overcome the gap; their outputs still fall short of what American cows generated in 1990. This reflects the United States’ longtime leadership in efficient milk production.
Finally, consider New Zealand, which is known for its dairy exports. Despite worldwide renown, New Zealand’s milk per cow fell 59% behind the United States. That’s a stunning discrepancy, meaning that New Zealand cows generated roughly 14,235 pounds less milk each cow each year.
These figures show that American dairy farms are competing and improving milk production efficiency. This unprecedented productivity enables U.S. farmers to supply local and worldwide dairy demand successfully.
Ever Wondered What’s Behind This Surge in Efficiency? Let’s Dive into the Magic Formula Transforming U.S. Dairy Farming
Ever wonder what’s behind this spike in efficiency? Look at the golden recipe revolutionizing dairy farming in the United States. Technology is playing an important role. Advanced milking machines, automated feeding systems, and precision agricultural equipment have transformed farm operations. These advancements are more than flashy gadgets; they are game changers that lower labor expenses and boost productivity.
However, technology alone does not tell the whole story. Breeding procedures have undergone a significant revision, and this is a crucial factor behind the surge in efficiency in U.S. dairy farming. Genetic selection and artificial insemination enable producers to raise cows with better characteristics, leading to healthier cows that produce more milk. According to the USDA, selective breeding has considerably increased milk output per cow over the previous several decades. This, combined with advanced technology and cutting-edge agricultural management strategies, forms a multidimensional approach that keeps U.S. dairy farms at the forefront of global milk production, establishing new benchmarks for efficiency and productivity.
Let us remember cutting-edge agricultural management strategies. Farmers use data analytics to track cow health, milk quality, and overall farm performance. These data-driven solutions facilitate informed decision-making, improving resource use and cow wellbeing.
It is a multidimensional method that combines technology, research, and intelligent management. This comprehensive plan keeps U.S. dairy farms at the forefront of global milk production, establishing new benchmarks for efficiency and productivity. So, the next time you drink a glass of milk, know there’s much thought and creativity behind that creamy pleasure.
The Ripple Effect: How Higher Milk Yields Are Transforming the Entire Dairy Industry
Higher milk yields aren’t beneficial to individual dairy farms; they’re practically rewriting the economic script for the dairy sector. Let us break it down. Dairy producers benefit immediately from improved milk output. Additional milk production produces additional products, including butter, cheese, and yogurt, resulting in a more diverse income stream. According to USDA research, the U.S. dairy sector’s cash revenues would amount to $42 billion in 2022, up from $35 billion in 2013 [USDA research]. That’s about a 20% increase in a little under a decade!
Furthermore, higher efficiency leads to decreased expenses per unit of milk produced. This is crucial because it increases farmers’ competitiveness in the global market. Farmers in the United States have maintained operating expenses roughly unchanged while increasing output by optimizing feed, improving genetic selection programs, and introducing modern milking technology. This efficiency makes U.S. dairy goods appealing to overseas purchasers, increasing profitability. According to the National Milk Producers Federation, exports accounted for around 16% of total U.S. milk output in 2022, up from 9% a decade before [NMPF Statistics].
These advances impact the whole economy, not just the agriculture sector. Increased milk production benefits downstream businesses in transportation, retailing, and equipment manufacturing. Dairy farming has the potential to generate significant economic multiplier effects. In Michigan, for example, the dairy business provides more than $15 billion to the state’s economy yearly, sustaining approximately 40,000 employees directly and indirectly. These figures demonstrate how increases in agricultural efficiency may benefit the whole area’s economy.
The increase in milk output has far-reaching economic consequences. For dairy producers in the United States, this implies more profitability and a more decisive competitive advantage. For the larger economy, it represents strong growth and employment creation. These interconnected advantages demonstrate why efficiency in milk production is more than simply a source of pride; it is also a cornerstone of economic health.
The Bottom Line
In today’s dairy sector, U.S. dairy cows’ increasing efficiency and production are extraordinary. Over the past decade, milk yields and component levels have improved significantly, propelling American dairy farmers to the forefront of global dairy production. States such as Michigan, Wyoming, and Colorado have established remarkable standards, with milk production continually increasing due to agricultural discoveries and developments.
Globally, the United States outperforms other major dairy-exporting countries such as Canada, the United Kingdom, and New Zealand. This domination fulfills the increasing demand for dairy products and establishes new industry norms globally.
How can you use these insights and improvements to improve dairy operations? What actions can you take to make your dairy farm more efficient and join the ranks of these record-breaking producers?
Discover how one man’s love for dairy farming and genetics has made a global impact. Want to know his secrets? Keep reading.
Horacio Larrea’s unique dairy farming adventure, which spans 35 years and includes game-changing technical developments, demonstrates his undying dedication. His time at Semex, where he was a key figure in the business, and how it has helped broaden his expertise. Join us as Larrea discusses his early inspirations and how technology impacts dairy industry today, including AI-based breeding programs and precision farming practices.
From Farmstead Beginnings: The Making of Horacio Larrea
Horacio Larrea started his adventure on a family dairy farm in Chivilcoy, Buenos Aires Province, Argentina. His early days were a blend of agricultural rhythms and rituals, establishing an excellent appreciation for the sector. Working with his father and grandparents, he received firsthand experience herding and milking Holsteins and Jerseys. This early immersion in farm operations gave him a thorough understanding of cattle. It sparked a lifetime of enthusiasm for the sector, pushing others to pursue their interests.
Horacio Larrea’s career changed dramatically in 1990 from farmhand to independent consultant. This brave change, motivated by a desire to forge his path, enabled him to share his knowledge and enthusiasm for dairy farming with other farms, assisting them in optimizing their genetic programs. His ability to discern genetic potential and the influence of superior breeding procedures and bloodlines became his trademark, paving the way for a long and prosperous career in dairy genetics consulting. His work has not only transformed farmers’ capacity to optimize their genetic plans. Still, it has also made substantial contributions to the growth of the dairy farming business.
What Drives a Lifelong Commitment to Dairy Farming? This question underpins Horacio Larrea’s journey, which has seen him dedicated.
For Horacio Larrea, dairy farming is more than just a profession; it’s a lifetime commitment motivated by a love for cows that has only strengthened over the last 35 years. Horacio was born and reared on a family dairy farm in Chivilcoy, Buenos Aires Province, Argentina, and his attitude to the business, which begins each day with the rhythm of milking Holsteins and Jerseys, distinguishes him from others. His relentless devotion to the company is genuinely inspirational.
Horacio’s affection for cows extends beyond everyday duties and the rural lifestyle. He says, “Take for sure that the main driver to make that decision was my passion for cows and that after 35 years, that passion remains intact”. Horacio’s profound connection to the animals and his extensive understanding of animal breeding from his father’s participation in the poultry, swine, and horse companies gave him a unique viewpoint.
This different experience emphasized a common aspect across all breeds. “In every breed, there are animals that outperform their respective herd mates, and it happens because of their genetics,” he says. This insight inspired Horacio to concentrate on dairy genetics, improving farmers’ abilities to utilize genetic programs and enhance their bottom lines. If you’re like Horacio, it may simply be in your blood.
Lessons in Passion, Learning, and Trust
Horacio Larrea grew up on his family’s farm where he developed an interest in the sector. Imagine the essence of tradition, unrelenting hard labor, and the delight of working with your father and grandpa. They milked Holsteins and Jerseys until 1990, creating in him an insatiable love for cows that has endured even after 35 years in the industry.
Horacio’s passion for genetics, however, genuinely distinguishes him. His father’s varied interests in poultry, pig, and horse breeding provided a distinct perspective. Observing various breeds and noting which animals outperformed their herd mates made him realize that genetics influence performance. This early discovery taught him the need for a robust genetic selection program in agriculture. Horacio’s passion for cows led to a profound interest in genetics and a lifetime commitment to dairy farming.
Trust, Transparency, and Lifelong Friendships
Horacio Larrea credits his father, Buby Larrea, for providing much of his professional acumen. From a young age, he acquired the invaluable lesson of trust. Says Horacio: “Only people that trust you will do business with you, but once they feel disappointed, that trust disappears.” This essential idea of responsibility and openness established the framework for his long-term customer connections, many of which have turned into lifelong friendships.
Horacio gained excellent insights from mentors and experiences in the dairy sector. His engagement with the Holstein Breeders Association of Argentina (ACHA) was considerable. “I owe so much to the Holstein Breeders’ Association. “They helped me develop as a judge and provided numerous opportunities for learning and growth,” Horacio adds. One of the most important things he learned was the value of a business-focused strategy. “We can love cows with all our hearts, but our job as genetic consultants is to help farmers make money, not just raise beautiful cows.” Focusing on economics above aesthetics requires an integrated approach to farm management.
Finally, Horacio emphasizes clear communication and teamwork within agricultural disciplines. “We need to be able to explain and measure the value of a breeding program without interfering with other disciplines or protocols established at the farm,” he says. Horacio emphasizes the importance of genetic consultants providing quantitative insights that illustrate concrete advantages in contemporary dairy businesses since decision-makers prioritize statistics over emotion or gut feeling. Finally, his story demonstrates the need to be business-minded while smoothly incorporating genetic developments into holistic farm management plans.
From Consultancy to Cattle Shows
Horacio Larrea’s consulting career has been remarkable. Horacio, a young consultant, prioritized learning from the finest in the business, a move that paid off well as he developed a career that spans continents from Argentina to South Africa and beyond. His consulting job was not confined to genetic programs; it included practically every facet of dairy farming management, making him a well-rounded specialist. He said, “Our job as genetic consultants is to help them make money, not to raise just beautiful cows.”
But let’s remember his work with animals. Fitting, or preparing animals for exhibitions, was fulfilling. “I had much fun doing it,” he says, admitting that it’s more appropriate for the younger age. Despite the physical challenges and the need for meticulous attention to detail, Horacio found the experience satisfying. He would assist his customers in presenting their cattle in the finest possible condition, often caring for their genetic programs and managing their show animals.
Balancing consultation and fitting presented its own set of issues. Consulting required a thorough grasp of dairy farm management and genetic development programs while fitting necessitated meticulous attention to detail and the capacity to operate under pressure. “You realize this is something for young people,” he adds, referring to the physically demanding aspect of fitting. However, the connections and trust he developed over time by working directly with customers were vital.
From Local Farmer to Global Genetic Consultant
Horacio Larrea’s career trajectory is extraordinary. He began on the family farm and became a prominent player in dairy genetics. After retiring from full-time farming, he pursued consulting work in Argentina, Uruguay, and Brazil, where he supervised genetic programs and show strings and judged several dairy shows, including international events in South Africa, Australia, and Canada.
In 1997, Larrea started working part-time for Semex Argentina. By 2000, he promoted Semex goods across Latin America, Africa, and Australia. This was followed by a tenure as Alta Genetics’ Sales Manager for Latin America, where he demonstrated his authoritative presence and extensive industry knowledge.
Remarkable accomplishments, including consistent growth in key markets such as Brazil, Italy, Argentina, and Mexico, have marked Larrea’s tenure at Semex. He also played an integral role in the Progenesis program, which he helped align with market needs to ensure top genetics were produced and effectively marketed globally.
Harnessing the Power of Genomics: Horacio Larrea’s Strategic Vision
When Horacio Larrea discusses the genomic age, his eyes light up enthusiastically. He was in the vanguard, welcoming genomics’ dramatic developments. They collaborated with Marita Holsteins and Lookout Holsteins, delving deeply into genetics. It was a period when investment in top genomic girls was affordable because of widespread uncertainty about their utility. Horacio’s strategic decision to invest in first-choice females from OPU rather than total donors enabled him to access top-tier bloodlines at a lower cost.
Marita Holsteins, one of Horacio Larrea’s prominent projects, has reached critical milestones in collaboration with Lookout Holsteins. This partnership includes the well-known brood cow OCD Robust Delicious, the Holstein International Cow of the Year 2018. A VG-87 Robust daughter, Delicious descends from the well-known Windsor-Manor Zip EX-95. Her accomplishments include being the dam of notable bulls such as Delta, Denver, Draco, and Dynasty.
The significance of cow families and genetics in breeding operations must be considered. According to Horacio, the secret to practical breeding is discovering better families and then using genetic testing to choose the finest individual animals from those families. This emphasis on cow families guarantees that desirable characteristics such as high productivity, health, and fertility are regularly handed forward. Genomics hastens this process, allowing breeders to quickly find and reproduce high-performing genotypes.
Horacio states, “Genetic selection is critical to thrive in any agriculture. I’ve attempted to maximize the benefits a solid genetic program may bring to a dairy farm’s bottom line.” The genomic age has enabled him and his colleagues to create breeding programs focusing on developing animals that contribute significantly to a farm’s profitability and sustainability rather than merely producing beautiful cows.
The Visionary Journey of Progenesis
Progenesis arose from a visionary project sponsored by the Ahedo Family of Spain and other Spanish investors in 2013. Horacio Larrea’s fundamental counsel, utilizing his significant expertise with Marita Holsteins and strong contacts with Alfonso Ahedo, helped the organization establish itself with just a half dozen contributors. This modest beginning swiftly grew into a solid genetic program focused on the NM$ and GTPI indices, catering to worldwide semen sales demand.
Progenesis differentiated itself by competent management, as defined by KPI targets, strict standards, and exact cost projections, which piqued Semex’s attention. In 2016, Semex shifted from a partner to Progenesis’s genetic nucleus owner, seeing the strategic opportunity. Progenesis has thrived under this cooperation, generating 50-60% of Semex’s bloodline across several indices such as GLPI, NM$, and GTPI. Progenesis incorporates qualitative features such as Polled, Red, and other genetic markers to provide a competitive advantage.
Horacio’s influence in this development has been multifaceted. He prioritizes commercial viability above genetic promise when choosing donors and sires to develop bulls that match demand. Horacio is likewise committed to preserving genetic variety at Progenesis. Balancing the program with diverse bloodlines and qualities promotes stability and overall genetic advancement. This variety helps to protect the genetic program from market changes. It retains its strength and relevancy in a continually changing sector.
Success in this business demands passion, precision, and a profound grasp of genetics. Nelson Ziehlsdorff, CEO of Semex Brazil, remarks, “Horacio brings a lifetime of dairy farming knowledge and experience. His deep study of genetics and his talent for teaching are clearly reflected in the consistent success of Semex’s Progenesis program.”
Riding the Wave of Transformation: Horacio Larrea’s Vision for the Future of Dairy Genetics
Horacio Larrea sees a revolutionary decade ahead for dairy genetics, in which the sector must adjust to enormous difficulties while seizing new possibilities. “The key challenges for dairy farmers in the next decade will be producing more milk with fewer cows, reducing the environmental impact, and lowering maintenance costs by decreasing disease incidence,” Larrea adds. He is confident that genetic breakthroughs will solve these vital concerns. “We have the tools to use genetic advancements more effectively, and they will be pivotal in meeting these goals,” he says.
Larrea notes that cutting-edge technology such as genomic testing, sexing, and IVF have changed the business, enabling unparalleled genetic development. “The combination of these technologies means that we can now select our best animals at a younger age and multiply them more intensively,” the scientist says. This fast improvement enables farmers to breed more efficient and productive cows, which is critical for sustainability and profitability. “I always stress to my customers the importance of breeding the best with the best, maintaining genetic diversity, and continually measuring and recording performance data,” his guidance states.
Finally, Larrea summarizes his forward-thinking mentality with the following statement: “Genetics is not expensive; what is expensive is to milk bad cows.” He urges farmers to invest in genetic improvements, pointing out that the long-term advantages surpass the initial expenditures. “Innovation and adaptability will determine the future of dairy production. “Those who capitalize on genetic advances will be at the forefront of this transformation,” he claims. The next decade will be challenging and exciting for dairy genetics, with tremendous opportunities for those willing to accept change and invest in the future.
Horacio has also become very well known around the world for his very educational posts on Facebook about the history of dairy cattle breeding and explaining complex problems in a simple way.
Horacio Larrea’s Cornerstones for Success: Loyalty, Expertise, and Personal Connection
The advice Horacio Larrea imparts to aspiring dairy farmers and those keen on venturing into dairy genetics is profound:
Emphasize Loyalty: “In this business, Loyalty is a cornerstone. Farmers are some of the most resilient and dedicated people you’ll ever meet, facing immense challenges daily. You build trust and mutual respect by being loyal and dependable. They will be loyal in return, creating a symbiotic relationship that’s not just professional but personal.”
Develop Technical Expertise: “Technical knowledge is imperative. You’re not just playing with cows; you’re shaping the future of dairy farming. This involves understanding genetic trends, mastering new technologies, and articulating complex concepts in a simple, actionable way. The industry is evolving at a breakneck pace, and staying technically adept ensures you’re adding value to farmers’ efforts.”
Build Strong Relationships: “Strong personal relationships are as valuable as technical skills. Sometimes, you must act as a psychologist, offering support beyond professional advice. Listen to farmers, understand their unique challenges, and tailor your solutions to meet their needs. The friendships and professional relationships you build in this field are invaluable, as trust and reliability are the bedrock of any successful consultancy.”
Horacio stresses Loyalty, technical prowess, and personal connection as the triad of success in dairy genetics. His career, spanning over three decades, is a testament to these principles’ profound impact.
The Bottom Line
Horacio Larrea’s rise from a family farm in Chivilcoy to a worldwide dairy genetics influencer is a monument to his unwavering enthusiasm, strategic vision, and devotion to innovation. His innovative approach, which combines practical knowledge with cutting-edge genetic technology, has altered several dairy businesses and redefined industry norms. Larrea’s commitment to maximizing genetic potential and his ability to adapt to changing market conditions have made him an essential figure in assuring the long-term viability and profitability of contemporary dairy farming.
As we look forward, we can’t help but wonder how new technology and ongoing genetic breakthroughs will define the next phase of dairy production. Will productivity, health, and efficiency improve even more dramatically? Only time will tell, but one thing is sure: leaders like Horacio Larrea will stay at the vanguard, pushing the industry ahead with unyielding passion and an inventive spirit.
Key Takeaways:
Horacio Larrea’s foundation in dairy farming began on his family’s farm in Argentina, setting the stage for his career in genetics and consultancy.
A deep passion for cows and genetics led Larrea into a career focused on maximizing genetic benefits for dairy farm profitability.
Early experiences in different livestock industries highlighted the importance of genetic selection for successful agribusinesses.
Trust, transparency, and accountability were essential in forming lasting relationships with clients and friends in the dairy industry.
Larrea’s career evolved from local consultancy and fit into a global consulting role, impacting farms in multiple countries.
His strategic use of genomics and partner programs like Progenesis enabled significant advancements in dairy genetics.
Technological innovations like genomic testing, sexed semen, and IVF have accelerated genetic progress and farm productivity.
Understanding and adapting to diverse market needs is crucial for success in the dairy genetics industry.
Larrea emphasizes the balance between breeding the best animals, maintaining genetic diversity, and continually measuring and recording data.
He advocates for loyalty and a deep understanding of customer needs, ensuring technical consultations align with their operational goals.
Summary:
Horacio Larrea’s journey from family to dairy to a global expert in dairy genetics underscores his passion for cows and commitment to trust His. Extensive experience from local farms to pivotal roles at Semex and their Progenes program shows the critical impact of genetics in modern dairy farming. Leveraging technologies such as genomic testing, sexed semen, and IVF, Larrea has driven advancements in genetic selection, ensuring more efficient and profitable dairy operations globally. His blend of technical expertise and loyal customer relationships exemplifies the transformative potential of applied genetic knowledge in the dairy industry, enabling farmers to optimize their genetic plans and contribute to the industry’s growth.
Learn why NZ dairy farmers are seeing a surprise drop in milk production. Are you ready for the market changes ahead? Discover the shifts.
Summary: The New Zealand dairy industry is grappling with a slight decline in fluid milk production, driven by high interest rates and rising input costs. Despite this, opportunities in the global market are emerging, particularly in dairy exports and cheese production. By adopting innovative strategies—diversification, cost management, and exploring new markets—farmers can navigate these challenges. The sector’s future hinges on balancing economic pressures with strategic growth. While fluid milk output declines, there is potential in the growing demand for cheese. Faced with global competition and shifting dietary trends, New Zealand dairy producers must adapt. High interest rates and input costs strain profitability, but innovative strategies can offer better margins and market distinctiveness.
The dairy industry is experiencing a slight downturn in fluid milk production due to economic challenges.
High interest rates and rising input costs are the primary factors contributing to reduced profitability.
Opportunities in the global market, especially in dairy exports and cheese production, could offset some of these economic pressures.
Innovative strategies, such as diversification, cost management, and exploring new markets, are essential for navigating current challenges.
Balancing economic pressures with strategic growth is crucial for the future of New Zealand’s dairy sector.
There is increasing potential in the demand for value-added dairy products like cheese amidst declining fluid milk output.
Adapting to global competition and changing dietary trends will be vital for maintaining market distinctiveness.
New Zealand’s fluid milk output is expected to fall somewhat, which is an unexpected development. While tiny, this slight alteration has enormous repercussions for the dairy sector, which is the backbone of New Zealand’s economy. Despite its small size, the expected fall in milk output might have far-reaching consequences, impacting everything from farm revenue to export potential. Understanding the underlying reasons and possible ramifications of this production decline is critical for dairy producers. This information enables them to make educated choices and react to changing market conditions, ensuring their businesses stay sustainable and competitive in the years ahead.
Will New Zealand’s Dairy Farmers Survive the Predicted Fluid Milk Production Drop?
Despite the modest but evident change in New Zealand’s dairy market, our dairy farmers have shown incredible resilience. Despite worldwide solid demand, local fluid milk output is expected to fall somewhat. Several indicators show the industry’s complicated state: high lending rates and rising input prices impose enormous strain on farmers, while export-focused efforts have had mixed outcomes.
While many dairy sectors face constraints, there is still tremendous room for expansion. Cheese consumption, for example, which was stable in 2023, is predicted to increase in 2024. This increase is due to increased earnings and the return of tourists eating out at pre-pandemic levels. Favorable weather conditions have increased pasture availability, which is somewhat countered by farmers’ financial demands.
Globally, New Zealand’s dairy business faces competitive challenges. Argentina is expected to modify its milk production dynamics in reaction to rising inflation via export methods such as a unique blended exchange rate for agricultural exports. Similarly, Australia’s fluid milk output is expected to expand to 8.8 million tons by 2024, owing to favorable weather circumstances. New Zealand’s dairy producers must be watchful and adaptable in this setting. This flexibility is critical because it allows them to balance local issues with global market possibilities, ensuring their operations stay competitive.
Adapting to Unpredictable Times: New Zealand’s Fluid Milk Production Faces Multifaceted Challenges
Several factors contribute to the predicted decrease in New Zealand’s fluid milk output. The most notable is the increasingly unpredictable environmental circumstances, which have presented significant problems to dairy producers. Weather patterns, ranging from droughts to heavy rains, affect pasture availability, milk supply, and quality. These harsh circumstances highlight the need for resilient and adaptive agricultural systems.
Another critical factor is the changing landscape of consumer demand. Traditional dairy products face fierce competition as global dietary trends move toward plant-based alternatives and a greater emphasis on sustainability. This shift is especially prominent in Western countries, where rising health and environmental concerns encourage reconsidering traditional dairy consumption.
The worldwide market dynamics cannot be neglected. New Zealand’s dairy business is inextricably related to the more significant economic climate, which is marked by high interest rates and growing input prices. Financial difficulties, worldwide rivalry, and shifting commodity prices lead to decreased profitability and output levels. Furthermore, the strategic shift to higher-value dairy products such as butter, cheese, and cream reallocates resources away from fluid milk production, indicating a purposeful effort to secure better margins and market distinctiveness.
The Harsh Economic Truths Facing Dairy Farmers: Navigating the Complexities of Declining Fluid Milk Production
The economic ramifications for dairy producers from the predicted fall in fluid milk output are complex and need a detailed understanding. Decreasing production might result in significant income shifts for small and large companies. Lower production volumes may result in higher unit costs since fixed expenditures such as facility upkeep and labor stay constant or rise due to increased input prices. As a result, profit margins may shrink, forcing farmers to look into other options for sustaining financial stability.
Revenue Shifts: Small-scale farmers may be disproportionately impacted since their small production capacity leaves less space to absorb increasing expenses. Larger enterprises, on the other hand, may benefit from economies of scale to alleviate some financial strain, but they are not immune to larger economic forces. Reduced fluid milk supply may force the sector to shift to more value-added goods, such as butter and cheese, which might somewhat offset revenue losses but need extra investment and skill.
Cost Implications: Rising input prices for feed, fertilizers, and electricity exacerbate the problem. As interest rates rise, debt service becomes more costly, reducing company margins. Small farmers, who often operate on short cash flows, may face increased risks of financial difficulty or even liquidation.
Profitability Concerns: To stay competitive and sustainable, small and big dairies would most likely need to simplify operations, use efficiency-enhancing technology, or diversify their product offers. Some may consider focusing on specialized markets or expanding into organic and specialty dairy areas. However, each strategy has its own set of hazards and investment needs.
Finally, despite the complexity of the difficulties, there are chances for adaptability and creativity. The capacity to negotiate these economic challenges will determine New Zealand’s dairy sector’s resilience and future viability.
Innovative Strategies for Navigating the Evolving Dairy Industry Landscape
Adapting to the changing needs of the dairy sector requires creative techniques and a proactive attitude. Here are some practical measures New Zealand dairy farmers can consider adopting:
Diversification: Spreading Risk and Increasing Income Streams
Diversifying product offers may provide new income streams while reducing reliance on fluid milk. Farmers might explore diversifying into cheese, yogurt, butter, or value-added goods such as specialty cheeses for specific markets. This protects against shifting milk costs and meets growing customer demand for diverse dairy products.
Cost Management: Streamlining Operations for Efficiency
Effective cost management is essential to preserving profitability despite variable production levels. This includes regularly assessing operating expenditures, optimizing feed and resource consumption, and investing in automation when possible. Precision farming equipment may assist in monitoring herd health and production, lowering waste, and increasing overall efficiency.
Exploring New Markets: Expanding Beyond Traditional Boundaries
Global dairy markets constantly change, and finding new export prospects may be a game changer. Building contacts with foreign customers, knowing regulatory needs in various locations, and leveraging trade agreements may lead to profitable markets in Asia, Europe, and beyond. Furthermore, selling organic or grass-fed dairy products might attract health-conscious customers all over the globe.
These techniques need meticulous preparation and an eagerness to experiment. Nonetheless, they provide a solid foundation for navigating the risks of fluid milk production and ensuring a sustainable future for New Zealand’s dairy producers.
The Future of New Zealand’s Dairy Sector Amid Market Dynamics: Challenges and Opportunities
The long-term forecast for New Zealand’s dairy sector in the face of current market upheavals provides a mix of difficulties and possibilities that can dramatically impact its future. The possible drop in fluid milk output must be balanced against the growing worldwide demand for diverse dairy products. An increased focus on sustainability and customers’ rising taste for value-added dairy products such as organic and specialty cheeses might accelerate sector reform.
One conceivable possibility is that the industry shifts its focus to increased production and efficiency to compensate for decreased milk quantities. Advancements in technology, such as precision farming and dairy management software, may lead farmers to adopt more sustainable data-based methods. Concurrently, the pressure to reduce greenhouse gas emissions is expected to increase, forcing farmers to incorporate environmentally friendly measures into their operating frameworks.
Another plausible outcome is intentional market growth and diversification. Exploring new overseas markets, particularly in Asia, might provide profitable opportunities for New Zealand’s dairy exports. Leveraging Free Trade Agreements (FTAs) and strengthening trade links will be crucial to this strategy. Creating non-dairy alternatives and leveraging the plant-based trend might provide further development opportunities.
While implementing these revolutionary techniques, the sector must avoid traps such as global economic changes, climatic variability, and competitive pressures from other dairy-producing countries. Australian fluid milk output, for example, is expected to grow, increasing competition. To survive and prosper in the changing global dairy scene, New Zealand’s dairy sector must maintain its resilience, implement adaptive tactics, and adopt a forward-thinking approach.
The Bottom Line
As we have navigated the complexity and uncertainties confronting New Zealand’s dairy producers, it is evident that both difficulties and possibilities exist. The minor drop in fluid milk output, caused by high interest rates and increased input prices, emphasizes the need for strategic adaptation. Diversification, cost control, and expansion into new markets are buzzwords and critical tactics for success in today’s unpredictable climate. While their efficiency varies, the government’s policies provide a framework for dairy farmers to maneuver to protect their livelihoods. To ensure the future of their business, dairy farmers must remain aware, adaptable, and aggressive in implementing new solutions. Adopting these strategies will assure survival while paving the road for long-term development and success in the ever-changing dairy business.
Learn how global food prices stayed steady in June, even with higher costs for sugar and vegetable oils. What might this mean for future food security?
The global stage of food commodities is often unpredictable, yet June saw a rare calm. The latest Food Price Index report from the Food and Agriculture Organization of the United Nations (FAO) revealed reassuring stability in international food commodity prices. The FAO Food Price Index remained at 120.6 points, unchanged from May. This stability resulted from increased vegetable oils, sugar, and dairy products balanced by declining cereal prices.
Due to this equilibrium, the benchmark for world food commodity prices remained unchanged. Specifically, the FAO Cereal Price Index dropped by 3% from May, driven by better production forecasts in major exporting countries. In contrast, the FAO Vegetable Oil Price Index rose 3.1%, fueled by global import demands and a strong biofuel sector. Hence, other declines offset the surge in some commodities, keeping the index stable.
Month
FAO Food Price Index
FAO Cereal Price Index
FAO Vegetable Oil Price Index
FAO Sugar Price Index
FAO Dairy Price Index
FAO Meat Price Index
January 2024
118.2
117.6
126.5
103.4
111.9
109.8
February 2024
118.9
117.9
127.3
104.1
112.7
110.1
March 2024
119.5
118.3
128.2
104.6
113.4
110.5
April 2024
120.1
118.5
129.0
105.2
114.1
111.0
May 2024
120.6
117.0
132.4
108.1
115.9
111.5
June 2024
120.6
113.6
136.5
110.2
117.3
111.6
FAO Food Price Index: Stability Amid Volatility in Global Food Markets
The FAO Food Price Index remains a vital tool for monitoring the international prices of key traded food commodities, empowering policymakers to make informed decisions that impact global food security and economic stability. In June, the index averaged 120.6 points, unchanged from May, showing a 2.1 percent decrease from last year’s time and a significant 24.8 percent drop from its peak in March 2022. This equilibrium highlights the balancing influence of various commodities; rises in vegetable oils, sugar, and dairy prices were offset by declines in cereal prices. Such data is crucial for policymakers and stakeholders in the global food supply chain, aiding in understanding and addressing the complexities of food pricing.
FAO Cereal Price Index: Favorable Harvest Prospects Drive Down Prices
The FAO Cereal Price Index , a key player in stabilizing the global cereal market, saw a significant 3.0 percent drop in June from May. This drop was driven by improved production prospects in key exporting countries. Enhanced harvest outlooks in Argentina, Brazil, Türkiye, and Ukraine have exerted downward pressure on prices. Favorable weather conditions in these areas boosted yield expectations for coarse grains, wheat, and rice, mitigating supply chain uncertainties and stabilizing the cereal market.
Surging Demand Propels FAO Vegetable Oil Price Index Upward
The FAO Vegetable Oil Price Index surged by 3.1 percent in June, primarily due to reviving global import demand for palm oil and robust biofuel sector needs in the Americas. This surge, a direct result of the growing demand, particularly from the biofuel industry, highlights the increasing influence of the vegetable oil sector on global markets. The biofuel industry’s strong demand for soy and sunflower oils further pushed prices up, reflecting a greater reliance on vegetable oils for sustainable energy.
Monsoons and Market Tensions: FAO Sugar Price Index Rebounds Amid Climatic Challenges
In June, the FAO Sugar Price Index climbed by 1.9 percent, ending a streak of three monthly declines. This rise is driven by adverse weather and monsoon disruptions impacting sugar production in Brazil and India. In Brazil, unexpected weather patterns have raised concerns about harvest outcomes, while irregular monsoons in India threaten production cycles. These climatic challenges have amplified market fears, pushing sugar prices higher and highlighting the fragile global food supply and demand balance.
FAO Dairy Price Index: Robust Demand and Shrinking Supplies Drive June Increase
The FAO Dairy Price Index climbed 1.2% in June. This rise was fueled by a robust global demand for butter, which reached a 24-month high due to strong retail sales and the need for immediate deliveries. Western Europe’s seasonal drop in milk production and low inventory levels in Oceania further tightened supplies, driving prices upward. These factors highlight a complex interaction between growing demand and limited supply, increasing dairy prices.
FAO Meat Price Index: A Study in Stability Amid Global Market Fluctuations
The FAO Meat Price Index held steady in June, as small increases in ovine, pig, and bovine meat prices balanced a drop in poultry prices. This delicate balance underscores the intricate dynamics of the global meat market, where diverse pressures and demands converge to maintain overall price stability.
Record-High Global Cereal Production Forecast for 2024 Driven by Enhanced Harvests in Key Regions
The global cereal production forecast for 2024 has been revised to a record 2,854 million tonnes, driven by better harvest prospects in critical regions. Improved maize yields in Argentina, Brazil, Türkiye, and Ukraine offset declines in Indonesia, Pakistan, and Southern Africa. Wheat production forecasts have risen due to favorable conditions in Asia, particularly in Pakistan, despite initial setbacks in the Russian Federation. Global wheat and rice outputs are expected to reach new highs, supporting this optimistic forecast.
Global Cereal Utilization and Stock Expansion: Balancing Rising Demand and Food Security
World cereal utilization is set to reach 2,856 million tonnes in the 2024/25 season, up 0.5 percent from last year. This growth is mainly due to increased consumption of rice and coarse grains, driven by population growth and changing dietary patterns globally. Simultaneously, global cereal stocks are projected to rise 1.3 percent by 2025, providing a stable buffer against supply disruptions. The cereal stocks-to-use ratio is expected to stay around 30.8 percent, indicating a balanced supply-demand dynamic. These insights highlight FAO’s expectation of improved stability in the global cereal market despite ongoing challenges.
FAO’s International Cereal Trade Forecast: Navigating Challenges to Ensure Global Food Security
FAO’s forecast for international trade in total cereals remains pivotal for global food security. Pegged at 481 million tonnes, this marks a 3.0 percent drop from 2023/24. The decline points to challenges such as geopolitical tensions, adverse weather, and changing trade policies among critical nations. This reduction affects global food availability, potentially causing ripple effects on price stability and accessibility, especially in regions dependent on cereal imports. Balancing global production, consumption, and trade demands vigilance and adaptive strategies. FAO’s monitoring and forecasting are crucial for providing insights and helping governments and stakeholders devise policies to maintain resilient food systems amid changing market conditions.
Compounded Crises: Conflict and Climate Extremes Aggravate Food Insecurity in Vulnerable Regions
The confluence of conflicts and climatic adversities has exacerbated food insecurity in regions grappling with poverty. In Yemen, prolonged hostilities have decimated agricultural infrastructure, leaving nearly 6 million people in acute food insecurity. This dire situation places Yemen among the countries with the most critical humanitarian needs.
The Gaza Strip, besieged and economically suffocated, faces a grave food security outlook. Persistent conflict and blockade have limited access to food, medical supplies, and essential services. This has put a significant portion of the population at imminent risk of famine, necessitating urgent intervention.
Similarly, Sudan’s volatile political landscape and recurring conflicts have escalated food insecurity. These factors and erratic weather have imperiled food production and accessibility. The population’s growing vulnerability underscores the urgent need for sustained international support and strategic initiatives.
These regions exemplify a broader pattern where conflict and climate extremes heighten food insecurity, compelling a global response focused on immediate relief and long-term resilience strategies.
GIEWS Report: Uneven Growth in Global Cereal Production Amidst Escalating Hunger Trends
The latest Crop Prospects and Food Situation report by FAO’s Global Information and Early Warning System (GIEWS) offers an in-depth look at hunger trends in 45 countries needing external food assistance. The report highlights an uneven growth in cereal production across Low-Income Food Deficit Countries. Southern Africa faces a nearly 20 percent drop in total cereal production due to severe drought, leading to a dependency on imports more than double the past five-year average. Zambia, usually a maize exporter, is forecasted to import nearly one million tonnes in 2024 despite an ample global supply of yellow maize. However, white maize, a staple in the region, remains scarce.
Beyond Southern Africa, regions like Yemen, the Gaza Strip, and Sudan are grappling with severe acute food insecurity, with millions at risk of famine due to ongoing conflicts and extreme weather conditions. The report calls for urgent international assistance to address these escalating humanitarian crises.
The Bottom Line
Amid fluctuating global markets, the FAO’s latest June data reveal a stable FAO Food Price Index, balancing international food commodity prices. While vegetable oils and sugar saw increases, cereals experienced a decline, leading to overall stability.
The FAO Cereal Price Index dropped due to favorable production forecasts in crucial exporting nations, while vegetable oils rose from renewed import demands. The Sugar Price Index rebounded, driven by climatic concerns in major production areas. The Dairy Price Index increased with robust global demand for butter, and meat prices remained stable.
Despite a record-high global cereal production forecast for 2024, vulnerable regions face severe food insecurity due to conflicts and climate extremes. This is particularly evident in Southern Africa, where projected cereal production declines will intensify import needs, especially for staple foods like white maize, which are in short supply globally.
Addressing these challenges requires enhancing international cooperation and leveraging technological advancements in agriculture to strengthen supply chains and improve productivity. Collective efforts are crucial for creating a resilient, sustainable, and equitable global food system.
Key Takeaways:
The FAO Food Price Index averaged 120.6 points in June, unchanged from May but 2.1% lower than June of the previous year.
Increases in vegetable oil, sugar, and dairy prices counterbalanced a decline in cereal prices.
The FAO Cereal Price Index dropped by 3.0% due to improved harvest prospects in major export nations.
The FAO Vegetable Oil Price Index rose by 3.1%, driven by global demand for palm, soy, and sunflower oils.
FAO Sugar Price Index increased by 1.9% following concerns over adverse weather impacts in Brazil and India.
International butter prices reached a 24-month high, pushing the FAO Dairy Price Index up by 1.2%.
The FAO Meat Price Index remained virtually unchanged, with a slight rise in ovine, pig, and bovine meat prices balanced by a decline in poultry prices.
Summary:
The Food and Agriculture Organization of the United Nations (FAO) has reported a rare calm in the global food commodity market, with the FAO Food Price Index remaining at 120.6 points. This stability is due to increased vegetable oils, sugar, and dairy products balanced by declining cereal prices. The benchmark for world food commodity prices remained unchanged, with the FAO Cereal Price Index dropping by 3% from May due to better production forecasts in major exporting countries. The FAO Vegetable Oil Price Index rose 3.1%, driven by global import demands and a strong biofuel sector. The FAO Food Price Index remains a vital tool for monitoring international prices of key traded food commodities, empowering policymakers to make informed decisions that impact global food security and economic stability. The global cereal production forecast for 2024 has been revised to a record 2,854 million tonnes, driven by improved harvest prospects in critical regions. World cereal utilization is set to reach 2,856 million tonnes in the 2024/25 season, up 0.5% from last year. FAO’s international cereal trade forecast remains pivotal for global food security, with a 3.0% drop from 2023/24.
Find out why Dutch milk supply is dropping while EU production is growing. What does this mean for European milk prices? Check out the latest trends and market changes.
As the Dutch dairy industry struggles with falling milk production, Europe faces a curious paradox: a ‘milk lake.’ This situation, where there is an excess milk supply, highlights the complex dynamics within the European dairy market and broader agricultural trends reshaping the industry. This article examines the contrasting developments in Dutch milk supply and rising milk production across the EU, as well as the ‘milk lake’ implications on market stability and pricing mechanisms.
While the Netherlands has seen a continuous decline in milk output due to factors like the bluetongue virus and regulatory changes, countries like Poland and Germany are witnessing growth. According to ZuivelNL, the EU milk supply has grown by 1.1 percent in the first four months of this year, whereas the Netherlands’ supply has dropped by 1.3 percent. These opposing trends raise questions about supply management, market stability, and pricing mechanisms within Europe’s dairy industry.
Unraveling the Drop: Biological Strains and Regulatory Chains Impact Dutch Milk Supply
Month
Milk Supply (million kg)
Change from Previous Year (%)
January 2024
1,100
-1.2%
February 2024
1,050
-1.0%
March 2024
1,200
-0.9%
April 2024
1,180
-1.5%
May 2024
1,150
-1.6%
The decline in the supply of Dutch milk stems from biological challenges and regulatory constraints. Last year, the bluetongue virus outbreak in autumn significantly impacted livestock health, reducing milk yield. This effect is evident in the 1.6% drop in May 2023 and a 1.3% average decrease over the first five months of 2024.
Compounding these biological issues are regulatory changes, specifically the phase-out of derogation, which historically allowed farmers to use higher manure levels to boost production. With stricter nitrogen emission and manure management rules now in place, the number of dairy cows per farm is capped, further limiting milk output.
In summary, combining the bluetongue virus and regulatory shifts, such as the end of derogation, has led to a notable reduction in Dutch milk production.
Diverse Trends in EU Milk Supply: Poland’s Surge Amid Ireland’s Struggles
Country
Milk Supply Change (April 2024)
Poland
+5%
Germany
+0.6%
France
0%
Ireland
-8%
The European Union’s milk supply has seen a notable rise, with a 0.6% increase in April and a 1.1% growth over the year’s first four months. Poland’s impressive 5% increase and Germany’s slight uptick have significantly boosted the EU’s overall supply. However, Ireland struggles with an 8% decline, and France’s growth has stagnated. These contrasts highlight the complexities within the European dairy market.
Stability Amid Complexity: European Milk Prices Buoyed by Sustainability Initiatives and Bonuses
Company
Price in May (€ per 100 kg)
Change (€ per 100 kg)
Sustainability Premium (€ per 100 kg)
Milcobel
44.10
0.00
0.78
Laiterie des Ardennes (LDA)
44.10
+0.50
0.49
DMK Deutsches Milchkontor eG
44.10
+0.51
0.50
Hochwald eG
44.10
0.00
0.80
Arla
44.10
+0.45
2.44
Capsa Food
44.10
+0.06
—
Valio
44.10
0.00
—
Savencia
44.10
-0.09
—
Danone
44.10
-0.03
—
Lactalis
44.10
-0.18
—
Sodiaal
44.10
0.00
0.29
Saputo Dairy UK
44.10
+0.05
—
Dairygold
44.10
+1.08
—
Tirlan
44.10
+0.15
0.50
Kerry Agribusiness
44.10
-0.19
0.10
FrieslandCampina
44.10
+0.47
1.21
Emmi
44.10
-0.62
—
Fonterra
44.10
+0.32
—
United States class III
44.10
-0.29
—
Since January, European milk prices have remained stable, around 44 euros per 100 kg. In May, the average was 44.10 euros per 100 kg, a slight increase of 0.07 euros from April. This steadiness is due to sustainability premiums and bonuses, including rewards for participating in sustainability programs, GMO-free milk, and other environmentally friendly practices. Such incentives buffer producers from market fluctuations and contribute to the stability of milk prices.
Global Dairy Dynamics: Diverging Trends Highlight the EU’s Stable Milk Supply Amid Global Volatility
Country
April 2024 Milk Supply Change (%)
January-April 2024 Milk Supply Change (%)
Poland
+5.0
+3.8
Germany
+0.8
+1.1
France
0.0
+0.5
Ireland
-8.0
-6.5
Netherlands
-1.6
-1.3
In the global dairy market, trends vary widely among significant exporters. Australia has recently shown resilience with a 3% growth. Conversely, the United States and New Zealand faced declines, with the US seeing a slight decrease and New Zealand a more significant 4% drop.
The situation is more severe in South America. Argentina’s milk production shrank by 16%, and Uruguay’s fell by 7% in April, highlighting regional challenges. In contrast, the combined volume of significant dairy exporters, including the EU, saw a modest 0.3% increase (0.35 billion kg) up to April 2024. These trends illustrate the diverse fortunes and impacts in the global dairy market.
The European dairy market paints a nuanced picture of butter and skimmed milk powder prices. Butter prices saw significant volatility in early 2024, rising sharply from mid-May to early June before stabilizing due to unexpectedly cool summer temperatures reducing cream demand. This stabilization has introduced uncertainty into the butter market.
Conversely, skimmed milk powder prices have been relatively stable but face competitive pressures from cheaper US and Oceania imports. Demand unpredictability, especially in Asian markets, has also contributed to minor price decreases through June, highlighting ongoing challenges in the market.
The Bottom Line
The European market presents a mix of trends as the Dutch milk supply declines due to biological and regulatory challenges. However, the EU sees growth, driven by Poland, while Ireland faces declines. European milk prices, buoyed by sustainability premiums and bonuses, remain stable amid global volatility. Globally, the EU’s stability contrasts with declines in New Zealand and Argentina. These contrasting trends underscore the potential for growth and the need for innovation and collaboration within the global dairy sector.
The dairy sector is currently grappling with biological strains, regulatory burdens, and economic challenges, all impacting profitability and market consolidation. Smaller farms are particularly at risk. In this context, strategic adaptive measures and support systems are crucial. It’s a call to action for policymakers, stakeholders, and farmers to unite, using sustainability initiatives to counter economic strains and ensure food security. The industry’s resilience is evident, but proactive regulation, sustainability, and financial support are essential. A combined effort is needed to enhance dairy farming. This analysis underscores the need for innovation and collaboration within the global dairy sector.
Key Takeaways:
The Dutch milk supply has continued its downward trend, recording a 1.6 percent decrease in May 2024 as compared to May 2023, attributed to the bluetongue virus and changes in derogation policies.
Despite the Dutch decline, the overall milk supply in the European Union increased by 1.1 percent over the first four months of 2024, driven by significant growth in Poland and slight increases in Germany, while Ireland’s output fell sharply.
European milk prices have shown remarkable stability, averaging around 44 euros per 100 kg since January 2024, buoyed by various sustainability surcharges and bonuses across different countries and companies.
Globally, major dairy exporters illustrated mixed trends, with Australia’s supply growing, while Argentina and New Zealand experienced substantial declines.
The Dutch dairy product market exhibited volatility, notably in butter prices, while skimmed milk powder prices faced competitive pressures from cheaper US and Oceania products, leading to slight decreases in June.
Summary:
The Dutch dairy industry is experiencing a’milk lake’ due to a decline in production due to the bluetongue virus outbreak and regulatory changes. The EU’s milk supply has increased, with Poland and Germany contributing to the overall supply. Ireland and France are struggling with declines. Sustainability premiums and bonuses contribute to market stability and milk prices. Global dairy market trends vary among exporters, with Australia showing resilience with a 3% growth, while the US and New Zealand face declines. South America’s situation is more severe, with Argentina’s milk production shrinking by 16% and Uruguay’s falling by 7%. Policymakers, stakeholders, and farmers must unite to counter economic strains and enhance dairy farming.
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