European Union milk production has risen in recent months, but is not expected to unbalance the market.

In its latest Agribusiness Monthly report, Rabobank said EU milk production rose 1.1 per cent in March compared with the same month last year.

Rabobank said Australian milk production for the same month fell 13.7 per cent as a result of adverse weather, while in the US, production remained relatively unchanged during April, according to the latest available figures.

In its May Global Dairy Update report, Fonterra said New Zealand production had decreased 10 per cent in April compared with the same month last year, due to dry conditions in most of the North Island and parts of the South Island.

But despite lacklustre production, dairy exports from both the EU and New Zealand continued to grow.

Fonterra said EU exports for February were 5 per cent higher than the same month last year, while New Zealand exports for March had risen 27 per cent this year compared with the previous year.

Rabobank dairy analyst Michael Harvey said with the season winding down in Australia and New Zealand, there was a focus on northern hemisphere milk production, particularly in Europe, which was entering its spring peak.

Mr Harvey said that might account for the recent relaxation in prices on the Global Dairy Trade.

“But we are not changing our view on the market remaining very well balanced,” he said.

“There is nothing putting pressure on milk prices.”

Mr Harvey said strong import volumes from China had surprised the market.

Fonterra reported its Australian milk intake for April had plummeted 31 per cent compared with the same month last year and season totals to the end of April were 19 per cent lower than for the same period last year.

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