European dairy looks at life after 2015

There has been a lot of investment going on worldwide in dairy, reported Mark Voorbergen (pictured), a dairy industry consultant from Claassen, Moolenbeek & Partners, speaking at the European Dairy Association’s Dairy Policy Conference held in Brussels this week. There is a quickening pace of demand and growth in emerging markets, which has a rapidly urbanising population that changes its diet when exposed to chill chains, he says. This means that demand for items such as pizza and other cheese-heavy fast foods is increasing. “Most net import countries don’t have a dairy tradition, but food service growth there is rapid,” he says.

The question is whether the European Union will be able to help fill the gap in demand,  Voorbergen states. The difference between Europe and formerly low-cost New Zealand milk is narrowing, as farming costs in the Southern Hemisphere increase, due to more intensive farming and increased input costs. He predicts that between 2014 and 2017, milk supply will start lagging behind demand growth, despite the post-2015 European landscape, which will be quota-free. He also warns that any attempts to control the European market through supply mechanisms may backfire. “There is no value in a centralised mechanism now, when there are opportunities coming short and long-term,” he notes.