Milk production still higher

Milk production during January and February 2015 was still 9,4% higher than in the same months last year. In January 2015, an estimated 263 million litres were produced. Production decreased to 224 million litres in February 2015 according to preliminary figures supplied by Milk SA. During 2014, 2 891 million litres were produced, 2,6% more than during 2013.

Higher grain prices, the expected increase in electricity costs and the current drought in the summer grain area may limit production growth in coming months. However, if production continues at this level, the market may become oversupplied in spring.

The higher production in the second half of 2014 and at the beginning of 2015 did not create an oversupply as the total market growth probably exceeded production growth.