Recently, the U.S. Dairy Export Council (USDEC) suggested that six nations — Denmark, France, Germany, Ireland, the Netherlands, and Poland — would be in the best position for growth post-quota. USDEC suggests that annual milk output from these six countries would grow by 26 billion pounds annually by 2020, representing a 7% increase over 2013 numbers, or slightly less than the state of Wisconsin produced in 2013.

USDEC admit’s its prediction is a midline number that could change in either direction, most dependent on farmer confidence heading into the new era. Meanwhile, the EU originally predicted growth of just 17 billion pounds from all countries by 2020, then revised it to 26.9 billion pounds — slightly higher than the USDEC prediction for six countries.

The latest short-term prediction from the European Commission expects 2015-2016 to see a modest 1.2% increase over 2014-2015,reported AgriLandThe quota is also playing with beef numbers on the continent, propping up numbers that could otherwise be devasting due to Russian bans on Western products, as Dairy Herd Management reported last month

Milk, cows, and population of selected countries

Countries

Milk production (2013, pounds)

Cows (2013)

Human population

Germany

66,880,681,818

4,268,000

80,620,000

France

52,947,954,545

3,697,000

66,030,000

Poland

21,898,181,818

2,299,000

38,530,000

Italy

21,315,454,545

2,075,000

59,830,000

United Kingdom

30,210,681,818

1,817,000

64,100,000

the Netherlands

26,955,454,545

1,597,000

16,800,000

Romania

1,940,227,273

1,169,000

19,960,000

Ireland

12,318,636,364

1,082,000

4,595,000

Denmark

11,092,045,455

567,000

5,614,000

EU-28 TOTAL

310,195,454,545

23,475,000

742,500,000

New Zealand

44,533,000,000

5,103,000

4,471,000

China 75,619,000 8,350,000 1,357,000,000

US TOTAL

201,218,000,000

9,221,000

316,500,000

Sources: Eurostat, USDA, US Census, Dairy Herd Management calculations

Based on history and land availability, Ireland may have the most opportunity for expansion over its current production. The country is positioning itself as a New Zealand of the north with growing Africa as a target for the excess production. Ireland was growing at a rapid clip of 8% per year before the quotas were installed. A recent Irish Cattle Breeding Federation report showed dairy calf births up 19% over last year, as Irish livestock farmers move to milk production, reports AgriLand

But the task will be revolutionary, as Ireland’s agriculture and food development authority, Teagasc, predicts nearly 1.5 million cows will be needed to meet the country’s goal of growing milk production by 50%, up from just over 1 million today.

History of EU milk quotas

On April 2, 1984, European milk quotas were installed to last only 4 years. The quota started based on each country’s milk production in 1981, plus 1%, after a period in the 1970s where the continent switched from becoming an importer of food to having excess production with high import tariffs.

Producers were charged a “superlevy” of 115% on anything above their quota, but revisions were required because those penalties were not enough to slow production in the late 1980s and early 1990s, according to a  FAPRI report by Julian Binfield.

Although the quota was not meant to hold value, it eventually did and became an asset that producers did not want to see lost. In 2004 and 2007, a total of 12 countries joined the EU and were allocated dairy quotas.

With the dairy downturn of 2008, annual 1% increases in quota were allowed in 2009 through 2013 (although Italy got all 5% in 2009).

On April 2, 2015, EU’s quota system would have turned 31 years old, but a day short of its birthday it will be lifted.