Economists in DG Agri in Brussels have released their projections for European dairy production over the period covering the abolition of quotas. With EU milk projected to increase by 2.8% in 2014. This equates to a 4 billion litre increase to 145.3 billion litres.

Projections for 2015 are for 2.3% growth. They give such conservative figures because of price projections, land and environmental constraints.

There will be an increase in production of powders, a reflection of increasing exports. SMP 17% and WMP +10% for this year. The key countries will be China, Algeria, Nigeria, Middle East and Nigeria. Analysts do point out the danger of growth of Chinese stocks in powders, undermining price.

In cheese they are seeing a decline of EU exports to Russia but the pressure offset by export rises to Middle East and North African markets.

With butter, the recent good press continues, with projections of demand rises with 3% increase in 2014 EU domestic markets and 9% for exports. The rationale for this growth are consumer taste changes and the campaign against the use of palm oil.

The good news in butter is somewhat counterbalanced with EU yogurt consumption projected to decline by 3% in 2014 with a decline in perception of health benefits blamed.