Government relief programs, retail channels, and overall demand were able to absorb much—but certainly not all—of the additional milk.
Betty Berning, analyst with the Daily Dairy Report, notes that “with the loss of dairy demand at foodservice, it is amazing that a home was found for much of 2020’s additional milk. Last year’s demand came in the form of government programs and elevated retail sales, along with strong purchases from key importing countries that were able to manage their Covid response well, such as China.”
Berning notes that China’s imports of skim milk powder (SMP) and whole milk powder (WMP) last year were lower than 2019’s record-high levels, after adjusting for leap year, but they were still strong. However, China’s 2020 imports of ultra-high temperature milk, at 845,000 metric tons (MT), climbed 16% above 2019 volumes while whey imports soared 38% to 626,000 MT, according to data from Trade Data Monitor.
Turning to milk production in the major exporting regions of the world, the EU27 and United Kingdom combined produced 0.9% more milk in the January through November period, compared to the comparable months in 2019, according to EuroStat data. “After adjusting for leap year, this group of countries produced 323.5 billion pounds of milk during this period, or 2.8 billion pounds more than the comparable period in 2019,” Berning notes.
From July through December, New Zealand’s 2020-21 milk production topped 6 billion pounds, up 0.7% from the same period in 2019-20. “Pasture conditions in New Zealand have been favorable, and weather concerns from earlier in the season appear to have abated. Soil moisture has also improved, with wetter-than-normal conditions now in the South Island’s key dairy regions of Southland and Canterbury,” Berning says. “Waikato, the major dairy region on the North Island, appears to be drier than normal, but reports from the region suggest pasture conditions there are still favorable.”
In nearby Australia, milk production for the January through November 2020 period increased 3%, adjusted for leap year, compared to the comparable period in 2019. Australia’s year-over-year production increase for the first 11 months of 2020 equates to an additional 511 million pounds of milk, Berning notes.
In the Western Hemisphere, preliminary U.S. milk production data released last week for 2020 indicates very strong adjusted growth of 1.9%, or just over 4 billion pounds of additional milk, compared to 2019. And although South American countries are smaller players in world dairy markets, Argentina increased milk production by 7.2%, or 1.7 billion pounds, in 2020 compared to 2019, and Uruguay added 250 million pounds to world supplies, a 5.2% year-over-year jump.
“All said, world milk supplies in 2020 were significantly stronger than in 2019,” Berning notes. “The EU27, United Kingdom, United States, New Zealand, Australia, Argentina, and Uruguay together produced an additional 9.25 billion pounds of milk, after adjusting for leap year. That’s about half as much milk as the United States produces in a month or nearly as much milk as Minnesota produced in all of 2019.”
