According to a new Rabobank report, signs of improving global dairy prices on the horizon point to a cautiously optimistic outlook for the dairy industry.
Despite the positive trend, dairy farmers worldwide continue to face margin challenges.
Against a backdrop of buyers with adequate inventories and macroeconomic concerns, global dairy demand has shown sluggishness in recent months, and milk supply growth continues to struggle. “Key exporting regions experienced weaker year-on-year production in the second half of 2023, and we forecast lower output for the first two quarters of 2024 before a positive turn in the latter half of the year,” explains Lucas Fuess, Senior Analyst – Dairy at Rabobank.
After two consecutive quarters of weaker supply, a firmly bullish price response would typically have materialized. However, with global buyers’ current stock levels and broader economic worries offsetting lower milk volumes, the supply and demand balance is different this time.
March 7, 2024
