World milk production is expected to reach 710.3 million tonnes this year, an increase of 1.6% on last year, according to the United Nation's latest figures.
The projected total represented a recovery from the low performance of last year the UN report says, but milk production remained below the average annual growth rate of 2.1% during the past decade.
"Additional output from China and India, the major contributors to the expansion of production, amount to 8.4 million tonnes, and account for 58% of the world increase," the report said.
"Brazil, the EU and the United States also play their parts by adding another 2.6 million tonnes."
Asia largest producer
According to the UN, Asia - with an output of 257 million tonnes - remains the world's biggest milk producer and boasts the highest rate of annual growth.
Lower production in Pakistan, where floods are expected to wipe off 8% of output, has led to a reduction in the initial 4% production growth forecast, to 2.6%.
Due to improved cow yields and lower slaughter rates, US production is forecast to increase 1.1% this year to 87 million tonnes. EU production is forecast to increase just 1% to 133 million tonnes.
On the price front, the UN's international dairy products price index has remained firm throughout this year.
While the UN said this was in contrast to the "swings" of the past two years, the index remains 20% below its early 2008 peak.
"Factors contributing to the sustained firm prices include strong demand from Asia, the Russian Federation and some oil-exporting countries and, more recently, a steady weakening of the US dollar against major currencies which increases dollar-denominated commodity prices," the report says.
"On the supply side, relatively weak growth in milk production from reduced cattle herds, particularly in some exporting regions, has under-pinned firm prices."
Feed prices suppress growth
It's expected higher feed prices would limit milk production expansion in the US next year, according to the US Department of Agriculture's Livestock, Dairy and Poultry Outlook released last month.
"The upward movement in feed prices will pressure producer margins and will likely curtail the modest recovery in cow numbers that began early this year," the report says.
Australia ups production
The rains which are dogging Australia's grain growers present a boon to the country's dairy farmers – a ready supply of fodder at a time when peers in some other countries face a shortage.
Australian milk production, dogged by drought for much of the last decade, is to rise by 300,000 tonnes next year to 9.7m tonnes, as the benefits of the rains help lift yields per cow near to record levels, the US Department of Agriculture's Canberra bureau said.
Source: WeeklyTimes, Australia