Markets should level out but bumps along the way

Published 19 April 17

Global dairy markets are expected to stay relatively level overall until at least mid-2017, but there is likely to be short-term volatility along the way, according to Rabobank. This is due to large SMP stocks, uncertain production volumes and currency fluctuations causing hesitation in the market.

The recent decline in global milk production has slowed and Rabobank expects volumes to strengthen as 2017 progresses. It predicts EU milk deliveries will exceed last year’s by 1.5% during the second half of this year. New Zealand production is also expected to rise but, as always, the extent of this will be weather dependant. Meanwhile, US growth is forecast to slow this year but still remain positive.

Rising demand from China is expected to help balance the growth in milk production, as the country’s stocks are now thought to be low. As a result, Rabobank predicts Chinese dairy imports will increase by 20% this year, compared to 2016.