Dairy market experts in Brussels are forecasting 2015 milk output growth of just 1.2% for the 28 member states in the European Union (EU).

In a generally upbeat assessment of the dairy market outlook, officials in DG Agri said that there has been a slowdown in milk production across Europe in the first two months of the year, even in countries not faced with a super levy bill for over-quota milk supply.

Buyers of dairy products are said to be holding back on purchasing beyond 1 April in the expectation that EU supply will increase sharply after milk quota abolition. This is creating some concern among dairy processors, who describe current market conditions as “fragile”.

However, experts in Brussels based DG Agri do not expect a surge in European milk production in 2015, as they believe that 2014 output was exceptionally strong. EU milk production for the 12 months to the end of November was up 5% on the same period in 2013. Processing capacity at peak season will limit growth in some regions, they said.

“Our thinking is that it should be quite smooth as we had the big shock in 2014,” experts at DG Agri said.

The 2014 production surge was due to a combination of favourable weather, lower feed costs and a high milk price.

EU Agriculture Commissioner Phil Hogan agreed that the overall level of production increase will not be dramatic. “There are about 7-8 member states that will increase production,” he said.

Irish sources have told the EU officials that they expect 12% growth in Irish milk production in 2015.

Commissioner Phil Hogan will be in Ireland on Thursday to open Glanbia’s new processing plant in Belview. Speaking in Brussels on Tuesday he commended the company for offering a fixed price for milk over the next three years.

“They have given great certainly to producers by offering a three year fixed milk price of 34 cent per litre. I am delighted to see Kerry Group doing the same – that gives a lot of confidence to farmers”.

EU officials believe that the European dairy market did “remarkably well” in how it coped with the impact of the Russian ban and a strong increase in EU milk supply last year. With EU exports to Russia banned and China purchasing less, EU exporters capitalized on the weak euro to export to new markets.

Some European dairy products did end up in Russia via other destinations, but EU officials were unable to estimate the volumes involved.