Massive milk lakes threaten to drown EU

European dairy processors already face competition from cost effective, large scale production in the rest of the world, but that pressure is now being stepped up.
The milk industry in North America is thriving and it has been reported that the 12 largest dairy farms in New Mexico now produce more milk than the Republic of Ireland’s annual output of 5.3 million tonnes. It is estimated that the region will increase milk production by at least 5% this year from a 1999 level of 91 million tonnes.
Australia and New Zealand are also in the midst of substantial dairy expansion. The rise in Australian milk output will be around 6%, or 700,000 tonnes, this year and the local dairy industry wants farmers to produce another million tonnes of milk within the next five years, making a 2005 output of around 13 million tonnes. Neighbour New Zealand is enjoying an even more spectacular milk year with production reckoned to have climbed 16%, representing an extra 1.8 million tonnes.
Despite the recent financial difficulties of many South East Asian countries, these markets are thought to hold great potential. This is undoubtedly the main reason for Australia and New Zealands’s race for more production. The good news is that the market in the Far East is so promising that these two countries will not be able to supply all dairy requirements, leaving room for European and American exports, at least in the medium term.
Less optimistic news about world market developments is that rapid growth in Mexican milk production