With the Easter holiday fast approaching, dairy farmers are hoping for plenty of cheese and butter sales for spring holiday cooking needs. Aligned with these grocery store sales, milk output is climbing toward its seasonal peak. However, prices, especially in the cheese market, struggled throughout the first quarter, keeping the Class III value weak and delaying any substantial margin recovery, much to the frustration of farmers hoping for renewed profitability after a challenging 2023. Into the remainder of this year, signs are emerging that milk revenues will improve, but it will likely be a slow recovery taking place over months, not weeks.
Globally, milk supply growth continues to struggle, with the second half of 2023 seeing weaker year-over-year production from the key exporting regions. A return to production expansion will take time. Rabobank forecasts lower year-over-year output for the first two quarters of this year before volume turns positive into the second half of 2024.
March 28, 2024
Lucas Fuess
