Milk production in North America to rise 1.6% in 2020: FAO

In North America, milk production is forecast at 110 million tonnes in the current year, 1.6% more year-on-year, FAO said.

In the United States, production is increasing, mainly due to the increase in the number of dairy herds and milk production.

Producer margins remained stable as producers received direct payments from the federal government under the assistance of Covid-19.

Additional support also came from strong demand for imports from Asia and Latin America.

Despite a slowdown in previous months, Canadian production may remain stable.

Always according to FAO forecasts, in Central America and the Caribbean milk production is likely to reach 19 million tons, an increase of 1.7% compared to 2019.

Despite moderate industrial and consumer demand, milk production can still increase in Mexico, the region’s largest milk producer, with the help of continued improvements in herd genetics and agricultural technology.

However, sustaining the expansion of production can become a challenge if domestic demand remains subdued and the contribution of small farms decreases as input costs rise.

Milk production

In South America, milk production is set at 62 million in 2020, slightly below (-0.2%) year-on-year, with anticipated expansions in Argentina, Chile and Uruguay, and contractions in Brazil and Colombia.

In Argentina, good rains that stimulated pastures and strong foreign demand led to improvements in production prospects.

The government’s decision to allow retail milk prices to rise by two percent provided a break for farmers, but keeping it will depend on stable labor and input costs.

In Chile, monthly milk deliveries in 2020 are above the levels of 2018 and 2019, indicating a possible expansion in production. Uruguay also benefited from a favorable climate, including good rains.

On the contrary, drought in some parts of the country and reduced demand for milk may cause a drop in production in Brazil, despite having large farms with high milk production.

In Colombia, unfavorable farm prices are a challenge, but the government encourages local milk consumption and processing along with expanding exports.