Positive outlook remains for dairy despite current downturn

Published 13 October 15

Rabobank has added to the raft of recent reports that continue to point to a positive outlook for dairy markets in the medium and long term. They report that while the downturn in the dairy market still has some time to go before any significant improvement in prices is seen, the underlying conditions encouraging growth in global dairy demand remain.

The latest quarterly report follows on from recent FAO-OECD and European Commission outlooks. All point out that the world population is still growing, incomes are rising in developing nations (although perhaps at a slower rate) and any moves by key importing nations to become self-sufficient remain constrained in the short to medium term.

Rabobank report that a number of mechanisms required on the road to recovery have now been triggered and prices are expected to improve from the second half of 2016. In the short term however, markets will not turn around until milk supply growth in exporting regions slows down, stocks are reduced and buyer sentiment shifts away from anticipating falling prices to expecting rising ones.