IFCN Dairy Report 2021 shows growth despite Covid-19
In spite of the global Covid-19 pandemic, the year 2020 was characterised by sustained milk production, which increased by 2.9%, compared with an average of 2.5% during the past decade, the IFCN notes in its annual Dairy Report 2021. On the one hand, this was the result of a rebound in production after slower growth in 2019. On the other hand, a stronger focus on self-sufficiency in some countries drove higher growth.
Trade was initially impacted by supply chain and transport disruptions, but this was compensated by strong import demand from China. Demand growth also kept up thanks to the positive image of dairy as a healthy product in many parts of the world, especially in South and South East Asia. Some emerging markets in Africa also benefitted from higher milk availability due to stronger production in comparison to 2019, IFCN reports.
Whereas the year 2019 was impacted by weather and climate-related issues such as drought but also natural disasters, milk production in 2020 rebounded in many of the affected regions (ie, Oceania, South America and Africa). Meanwhile, major exporters such as the US and the EU-27 witnessed stable growth in 2020 while importers like China and Russia increased their production at a faster pace than in the previous year.
Farm economics in 2020 were stable, albeit on a modest level, not least because of additional government support. The milk price, meanwhile, decreased by 1.8% to US$36.5/100 kg milk (SCM) in 2020. This slight decline can be interpreted as the consequence of strong milk supply in 2020 coupled with jittery markets and concerns over milk demand holding up in light of the Covid-19 crisis. Many consumers will also continue to have to watch their budget, which might constrain higher prices in the future, IFCN warns.