Positive outlook for milk producers in 2017

Milk producers can expect a better year in 2017 than in 2016. In a presentation at the Alzu Agricultural Economy Day held on Friday, 17 March MPO economist Dr Koos Coetzee told farmers that conditions in 2017 are more favourable than a year ago. International production growth has slowed down and important global exporting countries like Uruguay, New Zealand and Argentina experienced negative production growth in 2016. Globally, dairy product prices increased by more than 30% in 2016.

In South Africa total milk production in 2016 was 1,4% below that of 2015. Very little production growth is expected before spring. Lower grain prices have already resulted in higher margins for farmers and, as the expected lower grain prices are achieved, farmers’ situation will improve further. Lower grain prices will stimulate production growth after the winter. Dr Coetzee cautioned farmers to “enjoy improved conditions responsibly”.