Global demand for dairy set to grow as supplies slow

Advisers from across the European dairy sector forecast that global dairy demand will increase in the coming years.

Speakers at the Dairy Industry Newsletter conference in London on 7 May predicted that global demand for dairy products would remain firm, with increased interest from Asia.

Philipp Goetz, head of business development at the International Farm Comparison Network (IFCN), said importing countries were not increasing their self-sufficiency, and were not able to satisfy their own growing demand for dairy.

“If retailers in Europe don’t want to be paying the prices which we have been seeing in the past year, there are other retailers across the world who are going to pay for it,” he said.

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“Asia increasing its buying power is not temporary and will continue, and the demand there will increase even further.”

Christophe Lafougère, chief executive at international consultancy firm Gira, projects global dairy consumption will continue to rise, predominantly driven by demand from importing markets such as South East Asia.

He added: “European consumers need more cheese and are willing to eat more cheese, and that will continue in the future.”

John Lancaster, Head of EMEA dairy at StoneX, added that there was a strong global market for whey products at present, but poor margins for skimmed milk powders.

Global milk production

Mr Goetz said global milk production had grown throughout the past year, accelerating not just in specific regions but around the world.

However, the IFCN forecasts that global milk production growth will slow, partly driven by lower milk prices and higher input costs.

Mr Goetz added that the cost of milk production would be high in 2026, but could be higher still in 2027, as there was often a delay of six to 12 months from input cost increases to them being felt on farm.

Mr Lafougère also expects lower growth in milk production globally, although he says there could still be production growth in the US and South America in 2026.

He said the global slowdown in milk production would be offset by higher milk solids, fats and proteins.